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KPMG analyzes HR budgets and plans for 2015

KPMG analyzes HR budgets and plans for 2015

Russian companies are more likely to be considering headcount reductions ranging from 6% to 10%, while foreign companies rarely consider this course of action, and if they do, then they plan reductions of no more than 5% of staff.

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Almost half of the companies are planning to reduce their headcount, but these reductions are not very significant (reductions of no more than 10%). The need to reduce personnel costs is highest for companies in the financial services sector (95%) and FMCG sector (92%); and as our survey shows, companies in the pharmaceuticals and medicines sector are also considering this measure: 70% in 2015 as against 30% in 2014. Besides headcount reductions, companies are also planning to review their business processes and organisational structures.

Companies, as last year, would prefer to increase staff efficiency in 2015. Compared with 2014, companies are also planning to pay more attention to optimising HR costs, while reducing the priority of personnel recruitment and HR branding.

Just 27% of companies stated that they have no plans to increase salaries in 2015. This is increasingly typical for Russian companies (62%), whereas the vast majority of foreign companies already have increased or are planning to increase salaries.

Although 51% of companies are planning to increase their salary budgets, planned and enacted salary increases ("indexations") are only around 6-10%, and most companies are not planning to compensate exchange rate fluctuations. These measures, unfortunately, will not go far in covering losses against the actual rate of inflation.

More than half of those surveyed (58%) are planning HR budget cuts, with two-thirds of them planning to cut their budget by up to 10% and one-third planning to cut their budget by more than 10%. As usual, the first cuts fall on those costs connected with external providers (training, recruitment, corporate events). However, trends from previous years remain: companies are still planning to reduce the headcount in their HR departments. Our survey shows that 40% of companies are planning to do this.

The survey results show, that in comparison with 2009 this year companies are optimising their personnel costs in more strategic ways and are firstly improving efficiency by analysing their business processes and reviewing their organisational structures, and only then considering headcount reductions. Click here to read the survey.

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