St. Petersburg, May 2008

Labour Remuneration inSt. Petersburg:what employers offer

Anna Egorova, Head of Labour Market Research Department

St. Petersburg, May 2008 2

AVANTA Personnel is established in 2007 by high professionals with more than15 years experience in the market of human resources services and solid reputation.

We carry business in 9 regions of Russia, our staff is over 300 employees.

By 2010 we plan to occupy the leader’s position in HR services market by the high quality of services, size of business and geography of business.

Our Services: Management and Specialists Permanent Recruitment

(middle and top level)

Staff Leasing

Temporary Staffing

Large Scale Projects

Outstaffing

Labor Market Researches (Compensation Surveys)

Assessment Services and HR Consulting

AVANTA Personnel

St. Petersburg, May 2008 3

We conduct : Regular salary & compensation surveys in following regions:

Compensation Surveys

Customized salary & compensation surveys for the definite market niche upon the client’s request

Other investigations: labour market situation analysis, motivation surveys, etc.

St. Petersburg, May 2008 4

Salary and Compensation Survey in St. Petersburg

Salary and Compensations Survey for many years serves the source of trusted information for the companies working on St. Petersburg market.

Recent Salary and Compensations Survey - March 2008*: analyzed data received directly from 92 international and Russian

companies includes data on HR-policies of over 43 500 employees investigates Salaries of over 27 400 employees

Brief characteristics of the companies participated in the Survey: Investments:

49% foreign companies 40% Russian companies and 11 % joint ventures

Activity: 71% are manufacturing companies 54% have Sales Departments 18 % provides Services

Products: 40% - FMCG 54% - Industrial goods & services 18 % - Software Development 2% - other

* this presentation contains only short extracts from the Survey. To know more about the detailed report please follow the link: http://www.avantapersonnel.ru/news/obzor_zp_spb_08/

St. Petersburg, May 2008 5

competitive salary

flexible & clear bonus systems

compensations & benefits

training programs & career planning

incentive programs

1

2

3

4

5

Employers & Employees:Offers & Expectations

St. Petersburg, May 2008 6

Competitive Salary

49%

66%

52%

28%

inflation

labour market situation

personal achievements ofemployees

company performance

«white» salary, night work/ overtime compensation according to Labour Code - 92% companies

regular salary review based on inflation rate – 54% companies

regular salary review based on personal achievements, appraisal, company results – 93% companies

2007

95% companies increased salaries

average salary increase came to12-13%, maximum – 30%

factors influenced on the increase:

2008

91% companies plans to increase salaries

average planning salary increase comes to 10-12%, maximum – 30%

St. Petersburg, May 2008 7

Bonuses & Sales Commissions

Bonuses: 66% of participants pay performance-based bonus (company

performance, department performance, personal performance)

average amount of bonus is 12-20% of annual base salary depending on

position level

37% pay guaranteed bonuses (once/ twice a year, monthly, etc.)

– for foreign companies average amount of bonus is 7-11% of annual base salary depending on position level

– for Russian companies average amount of bonus is 12-18% of annual base salary depending on position level

47% pay anniversary bonuses

Sales commissions:

in average amounts 40-50% from base salary

St. Petersburg, May 2008 8

The most common benefits: medical insurance for employees – 78% companies:

Insurance can cover: - out-patient treatment- inpatient treatment- dental service- pregnancy management

average annual cost of medical insurance per employee RUR 14 803

lunch benefits - 73% companies:- lunches in own cafeteria- compensation in cash

average daily compensation for lunch is RUR 107

Depending on the position: Corporate vehicle: - for top-managers - in 57% of companies

- for managers – 29%- for sales personnel – 20-35%

> 90% companies compensate cellular phone expensesaverage monthly compensation amounts from RUR 380 to 3150 depending on position

> 80% covers business trips expenses (daily allowance) over the standards of Russian legislation

95% provide different training programs for employees

Compensations & Benefits

St. Petersburg, May 2008 9

Other benefits:

18%

35%

37%

41%

24%

21%

40%

23%

9%

15%

79%

91%

etc…..

Public transportation allowance

Shuttles to the factory

Additional compensation of sick leaves

Additional paid days-off

Life and accident insurance

Medical insurance for families

Sport benefits

Loans

Private pension programs

Stock options for employees

Financial aid in emergency case

Corporate entertainment programs

Compensations & Benefits

St. Petersburg, May 2008 10

Average monthly cash = base salary + actual bonuses

170 406145 578 144 199

020 00040 00060 00080 000

100 000120 000140 000160 000180 000

Plant Manager Regional SalesManager

Operationsmanager (SW Dev)

RU

R/

mon

th,

Gro

ssSome examples

89 563

73 212 73 797

010 00020 00030 00040 00050 00060 00070 00080 00090 000

100 000

HR Manager IT Manager Chief Accountant

RU

R/

mon

th,

Gro

ss

St. Petersburg, May 2008 11

In general:

coaching at job - 83% companies

internal programs of professional improvement – 58% companies

For specialists/ supervisors: Short-term (1-7 days) seminars on professional qualification improvement

conducted by external providers – 58% companies

Long-term (1-12 months) courses of professional education and qualification improvement conducted by external providers – 50% companies

Higher education

For managers/ top-managers: Advanced education programs in management (MBA, CIMA, etc.) – 27%

companies

Advanced professional education programs (ACCA, etc.) – 26% companies

Training programs & Career development

St. Petersburg, May 2008 12

Basic Level:

Corporate monthly, quarterly, semi-annual and annual contest on the appointment to a title “The Best” in various nominations with or without the Prize Pool

Placing the employee’s photo on the board of honor or mentioning the employee in corporate newspaper with his/her photo

Awarding employees with souvenirs with logos and corporate identities, presentation with corporate pins

etc.

For specialists/ supervisors:

interesting professional tasks, perspectives

career planning – in 40% companies, enrolling the employee into personnel reserve

well–known name of the company, good reputation of the employer

etc.

For managers/ top-managers:

interesting professional tasks

long-term perspectives in career development

freedom of choice, decision making

stability and positive dynamics of the business

well–known name of the company, good reputation of the employer ,

etc.

Incentive programs

St. Petersburg, May 2008 13

Comparison with regions of Russia

Average monthly cash = base salary + actual bonuses

in total:

100%

67% 62%55%

63% 58% 58% 64%

0%

20%

40%

60%

80%

100%

120%

St. Petersburg Vladivostok Yekaterinburg Krasnodar Novosibirsk Perm Rostov-on-Don Samara

St. Petersburg, May 2008 14

Comparison with regions of Russia

Benefits:

Medical Insurance

78% 75%

39% 44%

26%

62% 58%65%

St. Petersburg Vladivostok Yekaterinburg Krasnodar Novosibirsk Perm Rostov-on-Don Samara% o

f co

mpanie

s pro

vid

ing

the b

enefit

Lunch Benefits

73%

25%33%

41%47%

34%

48% 43%

St. Petersburg Vladivostok Yekaterinburg Krasnodar Novosibirsk Perm Rostov-on-Don Samara

% o

f co

mpanie

s pro

vid

ing

the b

enefit

Anna Egorova, Head of Labour Market Research Department

phone: 7 (812) 329-57-70e-mail: egorova@avantapersonnel.ru

Thank you for your attention!