Russian market overview: sales, investments, HR trends

We are pleased to present this Russian market overview prepared by Intercomp Macroeconomic Research Center based on a report on the expectations of market players as to sales, investments and wages drafted by our partner, CEEMEA Business Group.

Станислав Скакун, директор по экономике и финансам Интеркомп
Stanislav Skakun
Head of Finance
CEEMEA Business Group works with over 5,000 executives in over 400 global and regional companies from Europe, the Middle East and Africa. Thanks to our cooperation with CEEMEA Business Group, we can provide our clients with first-hand, high-quality, independent, cross-industry analytical reports intended for Russian top managers so that they can make informed strategic decisions.

A third of CEEMEA Group members claim that 2017 started well for them and in line with their expectations. Foreign head offices have fully accepted the current situation and are building solid relations with their Russian subdivisions. The “new Russian reality” causes no concern, and a slight increase in investments in some business areas has even been observed. On the flip side, budget expenditure is largely at the same level as in 2016, and business environment remains fairly austere.

Stanislav Skakun, Intercomp Financial Director, noted that business valuation coincides with the trend of recent months to revise forecasts for the development of the Russian economy in 2017. For example, the IMF has upgraded the forecast for economic growth in Russia, revising growth up from 1.1% to 1.4%, while UN experts expect economic growth to reach 1.5%, which is also an upgrade of their previous forecasts for 2017.

Prices, sales and new investments

44% of CEEMEA Group members consider that 2017 will be more fruitful than 2016. Compared to 2016, sales should grow in all industries. Maximum growth is expected in the next 2-3 months in the pharmaceutical industry and retail.

As mentioned in previous reports, businesses are not afraid to invest. A third of organizations are planning to invest in logistics, production and warehouse optimization, while almost 30% of companies are planning to reduce their budget for office rental. It should be noted that investments in sales and digital promotion have also been added to the list of investments.

HR trends and wages

The average wage growth will remain at 7% as confirmed by the data from our Salary Survey. Our experts noted a 7% increase in wages in 2016 and expect a 5-7% increase in 2017. The greater salary growth is observed in wholesale trade (9%), pharmaceutical (9%) and IT (11%) industries.

There are fewer talks of staff reduction with 76% of respondents saying that they do not plan to fire employees (compared to 60% last year). This is one of the best indicators in Eastern Europe.

Highly qualified employees are now less likely to change jobs. A third of respondents noted minor changes in company structure, and a third of managers claimed that they did not lose any valuable employees in the first months of 2017.

Companies are already now thinking about the growth of wages in 2018, but the factors for increase in salaries will be revised. Companies are trying to retain their staff and optimize personnel costs at the same time.

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