This Year, Hungarians’ Basic Salaries Rose by an Average of 7.5 percent
- Skilled professionals enjoyed pay increases of up to 8.9%
- Short-term incentives are widely used
- Company cars are still the number one fringe benefit
Vienna, December 17, 2018
Trained professionals’ earnings were up significantly in 2018
The study showed that steeply rising wages and the shortage of skilled professionals are continuing to put pressure on companies. For highly qualified workers, by contrast, these developments are good news: as organizations compete for top talent, professionals have enjoyed salary increases of up to 8.9%, equivalent to an annual basic salary of 2.7 million HUF. “Companies are complaining about the shortage of skilled professionals,” according to Dirk Wölfer, DUIHK’s head of communications. “The government is bringing down additional labor costs too slowly.” In November 2016, following consultation with employers’ and workers’ organizations, the government agreed to a staggered decrease, linked to actual salary increases, in employers’ social security contributions from 27% to the current rate of 19.5%. As a result, additional labor costs last year were more or less in line with the regional average.
Salary increases by hierarchical level
After skilled professionals, the second-highest salary increase was for executives, who enjoyed a pay bump of 7.8%, equivalent to an average annual basic salary of around 9.6 million HUF. “An employee’s hierarchical classification is a key determinant of their salary. It also reflects factors such as the position’s value in the company. In practice, there’s considerable variation in levels of total cash compensation,” according to Alfred Berger, head of compensation and performance management at Kienbaum. “Since executives have a significant influence on a company’s earning situation, their compensation is closely tied to how well their company performs.”
2018 was also a good year for salary negotiations for executive directors (annual basic salary of around 23 million HUF, equivalent to an 8.0% rise), middle managers (around 6 million HUF, 8.0% rise), and non-managerial employees (around 3.4 million HUF, 6.8% rise).
Fringe benefits and short-term incentives
Short-term incentives were widely used in Hungary again this year. Overall, over two-thirds of all non-managerial employees receive part of their compensation in the form of short-term incentives; for executive directors, this figure rises to 85%.
The number one fringe benefit was once again company cars. The more senior an executive, the more likely they were to be given a company car: 94% of executive directors, 54% of managers, and 16% of upper-level employees received this benefit. For executive directors, with a budget of 17.6 million HUF, Audi was by far the most common brand of company car, while for managers, with a budget of 8.3 million HUF, and middle managers, with 4.8 million HUF, the most common make was Škoda.
About the salary report
The salary report, now in its 20th year, is jointly produced by the DUIHK and Kienbaum. For the 2018 edition, real salary data on 15,605 positions was analyzed. Based on this analysis, the report describes 76 job profiles, including typical values for level of education, number of reports, and compensation components. Compensation levels are broken down according to both company turnover and number of employees. This provides HR managers with reliable, market-specific benchmarks that can be used to determine and plan compensation policies and individual salaries.
The salary report for Hungary can be obtained online at (https://shop.kienbaum.com/) at a cost of €1,100 (plus VAT). More information on compensation issues can be found on www.kienbaum-compensation.com.
Kerstin Wandt – T.: | E-Mail: Contact@kienbaum.de