With Lithuania and the world hit hard by the coronavirus pandemic, wages in Lithuania rose for 70 percent of the population this year, however, growth is half that of last year. Most organizations paid fewer bonuses, others froze base salaries, waived some additional benefits, and cut costs in other ways. Although in the context of the Baltic States, salaries in Lithuania did not rise the fastest this year, organizations here are the most optimistic – 9 out of 10 companies plan to increase salaries by an average of 4.1 percent next year.

Wages grew, but less than last year

The real growth of the monthly base salary this year is about 4.4 percent, and the annual salary with bonuses – 3.9 percent. That is 3 and 6 percent slower when compared to 2019 respectively. In other Baltic countries, the situation is similar – in Latvia monthly basic salary increased by 4.2 percent, in Estonia – by 6.3 percent.

The best wage growth indicators, amounting to about 5%, were maintained by the information technology, sales and financial sectors, while the services sector performed the worst, with wages falling by an average of 3.2%.

The base salary dropped for as much as 2 percent of workers this year and was reduced by as much as 10% during the quarantine. Although the percentage seems low, it was only 0.2 percent last year, therefore it is 10 times higher this year.

More layoffs, lack of leaders

This year, voluntary staff turnover fell by 2 percent and currently stands at 14.2 percent. The layoffs increased by 0.4 percent. and now stands at 5 percent.

It seems that voluntary change has decreased due to the increased importance of job safety – times of pandemic are full of uncertainty, workers are more insecure about their future, so they change jobs less often. Layoffs on the other hand increased – the companies made such decisions, most likely in order to optimize and cut costs.

According to the study, 17 percent of organizations laid off part of their staff, 7 percent took the opportunity to optimize the number of employees.

17 percent reduced the number of employees in companies by an average of 22 percent. Although this confirms the tendency that during the quarantine companies tried to optimize their teams and save costs in order to survive, the majority (even 59%) of the companies did not reduce the number of employees in the slightest.

To reduce staff shortages, companies continue to allocate resources to training and retraining.

Improving leadership skills remains a major challenge in the area of ​​human resources. This challenge has dominated the survey results for many years, regardless of sector. Therefore, we can confidently say that we have a very large leadership deficit in the labour market. It becomes even more pronounced in the face of a pandemic.

Saved by giving up additional benefits

31 percent of companies removed some additional benefits during the quarantine – snacks in the workplace, events. Some companies have given up all benefits.

Benefits such as snacks or team celebrations were moved to employees’ homes before the summer. After the quarantine has slowed down, most companies have decided to return to their offices and organize previously planned holidays, but as the number of cases increases, they plan to return to remote work.

10 percent of companies expanded the range of additional benefits and offered psychologist help, free coronavirus tests, and insurance. It also provided training for the whole family and, of course, increased opportunities for remote work.

The most popular additional benefits this year remain the same – mobile device and communication account coverage, entertainment events, courses and seminars.

Lithuanians do not lack optimism

Although wages grew less and were cut more often, Lithuanians are optimistic about the future. As many as 91% plans to increase the salaries of their employees next year.

In Lithuania, future forecasts are much more optimistic than in Latvia or Estonia, despite the fact that the level of concern about the COVID-19 the situation is higher. In Lithuania, in August, the company estimated the level of concern was at 3.4 points out of 5, while in Latvia it was only 2.8 points. In Lithuania, 91 percent of organizations plan to increase the base salaries next year, while in Estonia – 86 percent, in Latvia – only 75 percent.

It is forecasted that next year the change in the base salaries will be even lower than this year and will be about 4.1 percent.

1,000 organizations in the Baltic States, and 330 in Lithuania were surveyed.