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Financial crisis boosts Eastern managers purchasing power

The Romanian managers have climbed 14 spots up to the 8th spot in global rankings of the purchasing power in 2008. The reasons for this development include the world circumstances that have made the East and West reverse their positions with respect to that indicator. Another cause is the lack of competent managers in the emerging markets, a fact that leads to a genuine war of the salaries among the companies trying to attract them.
“Romania has already become an El Dorado for managers, especially for the Asian ones, where the available incomes are significantly lower. The economic development of the emerging markets, as the case of Romania is, has generated unprecedented demand for taking the managerial positions”, said Harry Meintassis, general manager of Hay Group Romania, the local subsidiary of the company having made the rankings.
The salary rises in the West are actually frozen, as many financial institutions had to shed personnel in the wake of the financial crisis, said Raiffeisen Bank chief economist Ionut Dumitru.
“The Romanians’ spending power has grown significantly in the last years, the salary rises have been very high, but they are above the productivity. In Romania, the personnel shortage in certain sectors has put pressure on the pay rises, while in the euro zone’s developed countries the salaries grew very little in the last years”, Dumitru added.

The top spots of the Hay Group rankings of the managers’ purchasing power are taken by the Middle East countries – Qatar, the United Arab Emirates and Saudi Arabia – while the Western countries see a drop in the spending power, with Austria ranking 15th, Germany 18th, Ireland 26th, Italy 32nd and France 33rd. The Central and Eastern European countries are placed in the upper part of the rankings.
Hay Group Romania head argues that Romania’s spectacular rise in the world rankings of the managers’ purchasing power is first and foremost explained by the international circumstances, the Business Standard daily reports.
“The financial crisis has affected most of the developed economies, including Spain, Switzerland and Germany, which had ranked better in the previous year. Romania, moreover, has the highest economic growth rate in Europe and benefits from a significant wave of foreign investment, that has put extra pressure on the companies, deepening the already existing talent crisis”, Meintassis said.
According to a Manpower survey, the managers rank third among the most difficult positions to fill in by the Romanian companies, while employers from most European countries identify but rarely such difficulty among the top ten difficulties.
“A foreign manager might consider convenient to be re-located to Romania, if we take into account the cost of living, which is much lower than in the West”, said Florin Pogonaru, the chairman of the Romanian Businessmen’s Association. He added that the best-paid managers in the local market are those in real estate, while the managers in the textile sector are among the worst paid.
“A competent manager who has similar responsibilities to the managers from another EU country will have almost the same salary in Romania too, taking into account the degree of mobility in the EU labour market”, said Petrom Oil Company’s communication director Dan Pazara, who also worked on the Wall Street in the United States in the early 1990s. He argues that the cost of living is not a determining factor in setting the payment, and that the Romanian-based managers who get lower payment than outside the country have the option of leaving.

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