Salaries of managers in SMEs increasing particularly fast

A study called “Germany Salary Increase Survey 2006 – 2007” conducted by Hewitt Associates has revealed that manager salaries increased by 3.3% in the year 2006 which represents a much bigger rise than that experienced by other groups of employees which on average earned 2.6% more. As was already the case in 2005, the salaries of top managers and of medium-level management in small companies with less than 100 employees increased most by 3.6% and 4.2% respectively.

The decisive factors influencing the development of salaries in small and medium-sized entities (SMEs) are above all business success and profitability as well as the general trend on the labour market. According to experts it is in particular SMEs which, by adopting innovative salary policies in line with the market, have to respond to the increasing demand for qualified staff and managers, if they want to compete with major enterprises. And this is exactly what is reflected by the above-average increase of manager salaries in SMEs.

According to the study´s authors the new figures also confirm the trend of variable salaries. The basic salary increases slowly, whereas the variable part increases constantly. Depending on the hierarchic level and the function of the person in question the variable part amounts to between 5 and 30% of basic salary. The variable part increased slightly at all hierarchic levels from 2005 to 2006. According to Hewitt the variable model is also more and more being applied to employees without manager functions and their variable part increases particularly strongly.

All the companies questioned expect the salary increase for 2007 to be similar to last year´s. Just 3% of companies surveyed said that they did not increase salaries in 2006, but this year no company believes to go without them. 92% of the companies examined in the course of the study reported to revise and optimize their salary policies once a year.

More than 1000 companies, of which 69 were German, from 15 European countries were asked in this intersectoral study. GERMAN