Automotive base salaries rise 8.1% as companies evaluate staff
Base salaries for automotive industry employees remaining in the same positions grew by an average of 8.1% over a 12-month period, while total annual compensation increased by 9.8%, according to a study by management consultancy and compensation research firm Figure Baltic Advisory reported by Travelnews.lv. These gains significantly outpace the broader labor market, where general base salaries rose 5.8% and total pay grew 7.1%. Despite the strong headline growth, companies applied increases selectively rather than across the board.
Variable pay outpaces general labor market
Variable compensation structures set the automotive sector apart from the broader economy. The share of variable pay in the automotive industry is more than twice as large as the general labor market average, according to the Figure Baltic Advisory research. While typical workers across the broader economy earn slightly more than one month of base salary in annual variable pay, automotive employees can reach nearly three months of base salary. This reflects an industry structure where earnings tie directly to individual performance metrics, such as sales volumes for vehicles, industrial machinery, and spare parts, alongside the volume and quality of repair and maintenance work.
In the automotive sector, we see relatively rapid salary growth, but that does not mean salaries grew equally fast for everyone,
said Juris Nīmants, head and leading consultant at Figure Baltic Advisory, as reported by Travelnews.lv. Pay was reviewed more selectively, and companies are evaluating more carefully which employees and positions need a salary increase.
Labor shortages drive down high workloads
Similar to the broader economy, the automotive industry faces severe recruitment hurdles centered on a shortage of highly qualified labor. Companies also grapple with heavy employee workloads, general staffing deficits, and the ongoing challenge of maintaining staff motivation. Unlike the broader market, where productivity enhancement dominates corporate concerns, automotive firms rank inflation among their top five operational challenges, assigning it greater weight than the general market does.
The shortage of labor in the automotive sector is especially noticeable in positions requiring specific technical knowledge and practical skills,
Nīmants explained to Travelnews.lv. At the same time, companies must think about reducing the workload of existing employees and motivation. These challenges are interconnected—if it is hard to find necessary specialists, the workload for current employees grows, increasing the risk of losing them.
Firms plan hiring as growth moderates
Automotive companies maintain a positive outlook despite ongoing staffing obstacles. Nearly four out of five organizations included in the Figure Baltic Advisory research plan to expand their headcounts before the end of the year. However, wage growth is expected to slow down. Over the subsequent 12 months, automotive enterprises anticipate average base salary increases of 4%, with total annual compensation projected to rise by 4.5%.
The Figure Baltic Advisory study examined data covering 1,865 employees, with 31% working outside Riga. The sample captures employment trends across the Latvian labor market, detailing compensation practices and pay levels across various job categories.
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