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. Last Updated: 07/27/2016

Ask the Boss

Q: Should employees expect a New Year's pay raise?

Luc Jones, partner, Antal International Russia/CIS:
In our experience, candidates tend to expect an annual bonus, payable at the end of the year, rather than a New Year's pay rise. In corporations with any kind of structure, raises tend to be given during performance reviews, which take place either at six- or 12-month intervals.

"However, due to the acute skills shortages in Russia/CIS at the moment, we are seeing a strong upward pressure on salaries and therefore pay rises are requested, and often given on a much more ad hoc basis than a few years ago -- many of these demands for pay rises are in fact counter offers when an existing employee is offered a pay rise to stay in his/her existing company after receiving an offer from another firm.

"People who are refused pay rises may begin to look around for another job -- employees should try to be realistic about what they are worth on the market; employers should remember that if someone does leave, the replacement cost of such a person is almost always higher than what the original employee was earning -- and possibly even more than after the proposed pay rise."

Natalya Danina, director, ANCOR Survey Services:
In practice, the salary review generally takes place in January-February. Approval of the wage indexation for the following year is done during the budgeting process, when the company sets its main financial parameters for the year ahead.

"There is no doubt that the staff expect their salaries to increase in comparison with the previous year. The size of wage indexation should be no less than the forecasted inflation for next year. According to our information, next year salaries will grow by 12 percent on average."