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Employee bonuses do not keep pace with wages, lower than before the pandemic

2025-04-23 07:30:00, Ekonomi CNA

Despite the increasing need for qualified employees and staff, data published by INSTAT show that Albanian companies continue to spend very little on training and rewarding their employees, while salaries are increasing at a faster rate than before the pandemic.

In 2023, all enterprises operating in our country provided 2.7 billion lek in the form of bonuses and training for employees. The average bonus in the business sector was 4,844 lek/year in 2023. This amount was slightly higher than in 2021, but much lower than in previous years, especially before the pandemic.

Average spending on employee compensation and training in 2023 was 20 percent lower than in 2018 and 70 percent lower than in 2010.

The performance of businesses' spending on training and employee compensation shows that Albania's economy is developing towards sectors that do not require skills. In the years 2000-2010, the entry into the market of large telecommunications companies and foreign banks stimulated investments in human resources, especially in their training. But in recent years the economy has been developing towards the services and construction sectors, which have greater needs for employees than for skills.

According to the graph below, which summarizes the progress of spending on training and rewards from 2010 to 2023, business investments for this purpose have had large fluctuations and a downward trend in the last decade. The peak of spending on this item was recorded in 2013 with approximately 4,452 million lekë, while thereafter, the graph shows a gradual decrease, with minor exceptions.

In 2023, total spending fell to just 2,682 million lekë, which is almost half of the highest level recorded a decade ago. The weakest year turns out to be 2022, with 1,747 million lekë, a worrying indicator for a labor market suffering from a lack of qualified power and internal motivation.

Labor market experts link this trend to the lack of long-term investment policies in human resources by businesses, but also to the pressure of other operational costs that push employers to cut budgets for training or motivational bonuses.

Most businesses view training as an expense, not an investment. This philosophy that businesses have for human resources harms their long-term efficiency, but also the overall employment climate./ Monitor.al