1. The Salary Survey of Estonian Employers and Employees Demo version Spring 2013

2. The Salary Information Agency specialises in: Salaries offered by employers by occupation Employees salary expectations by occupation Reward and benefit packages by job group Comparison of remuneration systems Salary adjustments and forecasts, and their causes Application of smart work arrangements The Salary Information Agency organises: Employers and Employees Salary Surveys Interpretation and analysis of salary statistics Round tables, seminars and conferences Advice to employers and employees on matters of salary and work organisation Publications: salary survey reports, compilations of articles Unique Evolving and engaging Representative Reliable Quick and immediate Sound methods Participant-friendly Smart investment The Agency's mission is to generate useful information for employers to help them create competitive remuneration packages and for employees to develop adequate salary expectations. Activities of the Agency

3. Salary surveys of employers and employees We use a similar method to survey employers, employees and job seekers Surveys are conducted twice a year - on April and October salaries Employers are asked about gross salaries and salary components Employees are asked about net salaries in specific months and salary expectations in desired jobs We use the International Standard Classification of Occupations (ISCO) The current survey is the fifth of its kind in Estonia (the first one took place in spring 2011) 350 employers expressed interest in participating 283 actually took part, additional 20 completed the online questionnaire only 9227 employees and job seekers took part For the first time, this spring survey covers Latvia and Lithuania 243 employers and 7488 employees contributed from Latvia 179 employers and 3163 employees contributed from Lithuania

4. Publications available from the Salary Information Agency Report name Description Date of publication Price (EUR) Price for participants (EUR) The Salary Survey Report on the Baltic States The Salary Survey Report on the Baltic States contains the conclusions of employers and employees salary surveys from all three countries. 1.08.2013 790 590 Employers and Employees Salary Survey Country Report (Estonia, Latvia, Lithuania separately) The report contains comparative conclusions of Employers Salary Survey and Employees' and Job Seekers Salary Survey for each country: basic salary adjustments and employers forecasts for adjustments, reasons behind adjustments, employees gross salary adjustments, changes in labour demand and how organisations react to these changes, work organisation and working conditions in organisations, employers and employees views on work organisation and working conditions, forms of employee representation and employees participation in these representations, salaries in April 2013 (statistical average, median, 1st and 3rd quartiles, 10th and 90th percentiles), including salary components and employees salary expectations, in 30 job sectors. 1.07.2013 390 195 The Employers Salary Survey Report The report contains the conclusions of the Employers' Salary Survey in each country: basic salary adjustments, forecasts and reasons for adjustments, changes in labour demand and how organisations react to these changes, work organisation and working conditions in organisations, forms of employee representation, salaries in April (statistical average, median, 1st and 3rd quartiles, 10th and 90th percentiles), including salary components, in 30 job sectors. 1.07.2013 250 150/0* Participant Report for Employer Similarly to the Employers Salary Survey Report this report contains summaries of basic salary adjustments, work organisation and other related topics, as well as average salaries (statistical average, median, 1st and 3rd quartile, 10th and 90th percentile) by occupation in April 2013 in those sectors that the particular participant submitted salary data about. If the participant submitted data for more than two job sectors, the Employers Salary Survey Report will be free of charge for them. 1.07.2013 not available 0 Sector report on employers and employees salary survey outcomes The report contains a short summary of the main conclusions of the salary surveys, and April 2013 salaries in one sector (eg manufacturing, transport, trade etc.) of the relevant country, incl. salary components and employees salary expectations. 1.07.2013 150 75

5. PROFILE OF SURVEY RESPONDENTS The Employers Salary Survey

6. Number of respondents 283 243 179 0 50 100 150 200 250 300 Estonia Latvia Lithuania Employers 9227 7488 3163 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 Estonia Latvia Lithuania Employees 6

7. Need for relevant salary information 1% 23% 47% 25% 0% 5% 23% 45% 26% 4% 3% 0% 10% 20% 30% 40% 50% Never require relevant salary market information Very rarely once a year Rarely once a quarter Regularly once a month Often - once a week Very often daily Need for salary information Spring 2013 Autumn 2012 80% 31% 3% 4% 19% 78% 25% 3% 2% 8% 0% 50% 100% Official statistics Fontes salary survey Hay Groups salary survey Mercers salary survey Other Sources used for salary market information Spring 2013 Autumn 2012

8. 0% 5% 10% 15% 20% 25% 30% Agriculture, forestry and fishing Mining and quarrying Manufacturing Electricity, gas, steam and air conditioning Water collection, treatment and supply Construction Wholesale and retail trade Transportation and storage Accommodation and food service activities Information and communication Financial and insurance activities Real estate activities Professional, scientific and technical activities Administrative and support service activities Public administration and defence, Education Human health and social work activities Arts, entertainment and recreation Other service activities Other Spring 2013 Autumn 2012 Spring 2012 Responding organisations by economic activity

9. 0% 5% 10% 15% 20% 25% 30% 35% 1-9 employees 10-19 employees 20-49 employees 50-99 employees 100-249 employees 250-499 employees more than 500 employees Spring 2013 Autumn 2012 Kevad 2012 Responding organisations by employee range

10. 0% 10% 20% 30% 40% 50% 60% 70% Harju county ... Tallinn Hiiu county Ida-Viru county Jgeva county Jrva county Lne county Lne-Viru county Plva county Prnu county Rapla county Saare county Tartu county Valga county Viljandi county Vru county Spring 2013 Autumn 2012 42% 36% 26% 14% 85% 0%20%40%60%80%100% Only in Tallinn or Harju country Harjumaa and Tallinn and foreign countries Outside Tallinn and Harju country Estonia and foreign countries Only Estonia Spring 2013 Autumn 2012 Spring 2012 Respondents region of activity

11. PROFILE OF SURVEY RESPONDENTS The Employees Salary Survey

12. 0% 5% 10% 15% 20% Construction and real estate Energy, electricity and electronics Representative organisations and other Finance and accounting Education and training Humanities and the creative sector Information and telecommunication Information workers Personal services Management and business services Mining Environmental protection and waste Clerical and administrative work Protective and emergency services Earth and engineering sciences Accommodation and food service Sales and marketing Banking and insurance Human resources and employment Cleaning works Agriculture, forestry and fishing Advertising and PR State and public administration Social work and welfare Sports, culture and leisure Health care and medicine Transportation, storage and logistics Industry and manufacturing Law Spring 2013 Autumn 2012 Area of work

13. 0% 5% 10% 15% 20% 25% Construction and real estate Energy, electricity and electronics Representative organisations and other Finance and accounting Education and training Humanities and the creative sector Information and telecommunication Information workers Personal services Management and business services Mining Environmental protection and waste Clerical and administrative work Protective and emergency services Earth and engineering sciences Accommodation and food service Sales and marketing Banking and insurance Human resources and employment Cleaning works Agriculture, forestry and fishing Advertising and PR State and public administration Social work and welfare Sports, culture and leisure Health care and medicine Transportation, storage and logistics Industry and manufacturing Law Kevad 2013 Sgis 2012 Desired area of work

14. 4% 75% 8% 1% 1% 8% 0% 1% 1% 3% 5% 3% 0% 20% 40% 60% 80% Entrepreneur Full-time salaried employee Part-time salaried employee Apprentice Voluntary worker Studying at school or Conscript Pensioner On parental leave Registered unemployed Do not work or study Labour status Spring 2013 Autumn 2012 17% 11% 16% 14% 15% 9% 18% 0% 5% 10% 15% 20% 1-9 employees 10-19 employees 20-49 employees 50-99 employees 100-249 employees 250-499 employees more than 500 employees Number of employees in current workplace Spring 2013 Labour status and size of organisation where respondent works

15. 0% 19% 18% 18% 13% 15% 12% 2% 3% 0% 0% 5% 10% 15% 20% 25% Doctoral degree Masters degree Bachelors degree Vocational higher education Post-secondary vocational education General secondary education Vocational secondary education Vocational education after basic education Basic education Less than basic education Education Spring 2013 Autumn 2012 19% 43% 0% 5% 1% 1% 1% 3% 1% 5% 2% 1% 12% 1% 2% 1% 0% 10% 20% 30% 40% 50% Harju county ... Tallinn Hiiu county Ida-Viru county Jgeva county Jrva county Lne county Lne-Viru county Plva county Prnu county Rapla county Saare county Tartu county Valga county Viljandi county Vru county Place of residence Spring 2013 Autumn 2012 Place of residence and education

16. 64% 36% 61% 39% 0% 10% 20% 30% 40% 50% 60% 70% Female Male Gender Autumn 2012 Spring 2013 0% 9% 33% 28% 21% 9% 1% 0%0% 11% 38% 25% 18% 8% 1% 0% 0% 5% 10% 15% 20% 25% 30% 35% 40% 15 or younger 16-24 25-34 35-44 45-54 55-64 65-74 75 or older Age Autumn 2012 Spring 2013 Gender and age

17. CHANGES IN BASIC SALARIES The Employers Salary Survey

18. Share of respondents who had not changed and did not plan to change basic salaries Share of respondents who had raised basic salaries and average rises during the previous 6 months (Nov 2012 Apr 2013) Share of respondents who were planning to raise basic salaries and average planned rises in the following 6 months (MayOct 2013) Employees impacted by pay adjustments (%) Reasons behind salary changes during the previous 6 months (%) Reasons behind salary changes scheduled for the following 6 months Slides in the full version of the Salary Survey Report

19. NET SALARY CHANGES The Employees Salary Survey

20. Slides in the full version of the Salary Survey Report Changes in net salary Apr 2012 Apr 2013, share of respondents (%) Average rise in net salary Apr 2012 Apr 2013 Net salary changes Apr 2012 Apr 2013, by occupation group Average rise in net salary Apr 2012 Apr 2013, by occupation group of respondents Net salary changes Apr 2012 Apr 2013, share of respondents by size of employers organisation Changes in net salary Apr 2012 Apr 2013, share of respondents by gender Changes in net salary Apr 2012 Apr 2013, share of respondents by age group Changes in net salary Apr 2012 Apr 2013, share of respondents by level of education Changes in net salary Apr 2012 Apr 2013, share of respondents by place of residence

21. LABOUR MARKET SITUATION

22. 0 100 200 300 400 500 600 700 800 900 15-24 years old 25-49 years old 50-74 years old 20-64 years old 2000 y. Population census Before 2011. y. Population Census Calculation bases on 2011.y. Population Census Prognoses fo 2025. y. Demographic situation Source: Statistics Estonia, presentation by economist Maris Lauri on 21 June 2013 Statistics - population

23. Employed, thousands Unemployed, thousands Inactive persons, thousands Population 31.12.2011 - employed Population 31.11.2011 - unemployed Population 31.11.2011 - inactive persons 0 100 200 300 400 500 600 700 1997Iqv IIIqv 1998Iqv IIIqv 1999Iqv IIIqv 2000Iqv IIIqv 2001Iqv IIIqv 2002Iqv IIIqv 2003Iqv IIIqv 2004Iqv IIIqv 2005Iqv IIIqv 2006Iqv IIIqv 2007Iqv IIIqv 2008Iqv IIIqv 2009Iqv IIIqv 2010Iqv IIIqv 2011Iqv IIIqv 2012Iqv IIIqv 2013Iqv Labour status by labour force survey and 2011 Population Census Source: Statistics Estonia, Social life, Labour market Statistics labour market - 55 thousand - 10 thousand +7 thousand

24. 0 20 40 60 80 100 120 140 160 Unemployed persons by duration of unemployment ..24 months or longer 12-24 months 6-11 months Less than 6 months Source: Statistics Estonia

25. Statistics labour turnover 0 1 2 3 4 5 6 7 8 9 10 2008 I qv II qv III qv IV qv 2009 I qv II qv III qv IV qv 2010 I qv II qv III qv IV qv 2011 I qv II qv III qv IV qv 2012 I qv II qv III qv IV qv 2013 I qv Labour turnover Rate of engaged employees, % Rate of left employees, % Rate of dismissed employees, % Rate of job vacancies, % Source: Statistics Estonia

26. Statistics vacances 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 jaan.03 mai.03 sept.03 jaan.04 mai.04 sept.04 jaan.05 mai.05 sept.05 jaan.06 mai.06 sept.06 jaan.07 mai.07 sept.07 jaan.08 mai.08 sept.08 jaan.09 mai.09 sept.09 jaan.10 mai.10 sept.10 jaan.11 mai.11 sept.11 jaan.12 mai.12 sept.12 jaan.13 mai.13 Vacances at the end of months Source: The Estonian Unemployment Insurance Fund

27. 0 200000 400000 600000 800000 1000000 1200000 1400000 1600000 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 500000 Personnelexpences Personsemployed Number of persons employed and personnel expences 2001 I qv 2013 I qv Number of persons employed Personnel expences (wages and salaries, social security costs), thousand euros Source: Statistics Estonia, Financial statistics of enterprises

28. 0 10000 20000 30000 40000 50000 60000 0 500 1000 1500 2000 2500 3000 3500 4000 4500 2006 I qv II qv 06 III qv 06 IV qv 06 2007 I qv II qv 07 III qv 07 IV qv 07 2008 I qv II qv 08 III qv 08 IV qv 08 2009 I qv II qv 09 III qv 09 IV qv 09 2010 I qv II qv 10 III qv 10 IV qv 10 2011 I qv II qv 11 III qv 11 IV qv 11 2012 I qv II qv 12 III qv 12 IV qv 12 I qv 13 1-9employees 10andmoreemployees Number of entreprises 10-19 employees 20-49 employees 50-99 employees 100 and more employees 1-9 employees Source: Statistics Estonia, Financial statistics of enterprises

29. JOB SEEKING The Employees Salary Survey

30. Recruitment market 996 937 1240 1 370 1 473 20439 21802 18 618 19 887 20 310 20,5 23,3 15,0 14,5 13,8 0,0 5,0 10,0 15,0 20,0 25,0 0 5000 10000 15000 20000 25000 2009 2010 2011 2012 2013 Share of job offers and applicants Published job offers Applies Applicants for the job offer Source: CV-Online database

31. Job seeking activities Job seekers by labour status and area of activity Job seekers by occupation group and by years in service Job seekers by size of current employers organisation Job seekers by gender, age group and level of education Slides in the full version of the Salary Survey Report

32. CHANGES IN LABOUR DEMAND & ASSESSMENT OF LABOUR MARKET SITUATION The Employers Salary Survey

33. Changes in labour demand share of respondents who need additional people Changes in labour demand by economic activity Changes in labour demand by size of organisation Labour demand forecast Employers assessment of labour market situation Dealing with labour shortage Slides in the full version of the Salary Survey Report

34. WORK ORGANISATION Sponsored by Microsoft

35. 7% 20% 15% 20% 33% 32% 33% 43% 4% 8% 10% 16% 18% 21% 26% 37% 0% 20% 40% 60% 80% 100% I can greatly influence my pay. I can influence the criteria used to assess my work performance. I can decide where I work and how and when I get there. I can organise my own working hours, fixed hours are not enforced. I have a say in setting my work and performance targets and deadlines. I can plan my own work process and when I do what. I can choose myself how to do my work and what methods and techniques I use. Independence in organising my work is important to me. Autonomy in work organisation 4- agree 5- strongly agree Work organisation employees views

36. 34% 19% 23% 28% 10% 23% 25% 54% 0% 20% 40% 60% 80% 100% Employees have a say in setting work and performance targets and deadlines. Employees can manage their own working hours, fixed hours are not enforced. Employees can plan their own work process and when they do what. Employees can choose how they do their work and what methods and techniques they use. Employees can decide when they need to come in and how and when they get there. Employees can influence the criteria used to assess their work performance. Employees can greatly influence their pay. Employees' independence in organising their work forms an important part of our organisation's work culture. Autonomy in work organisation 3 true for office workers depending on the nature of their job 4 true only in case of managers and top professionals 5 true for most employees Work organisation employers views

37. 29% 33% 32% 29% 37% 44% 39% 14% 14% 15% 18% 21% 37% 49% 0% 20% 40% 60% 80% 100% Our organisation and/or department is well managed. I am satisfied with my work organisation. My work environment fully supports achieving the best performance. My job offers me professional development. Work organisation in my current job suits well with my personal lifestyle. I feel that I am trusted at work. I have good relations with my colleagues. Working conditions and environment 4- agree 5- strongly agree Work organisation employees views

38. 45% 51% 47% 47% 44% 51% 49% 7% 20% 25% 33% 36% 38% 40% 0% 20% 40% 60% 80% 100% Work organisation takes into account employees personal lifestyles (studies, family etc.). Our employees have opportunities to develop professionally. The relations between our employees are good. We trust our employees. Our work environment is fully supportive of achieving the best performance. Our organisation and/or department is well managed. Our organisation has the best possible work organisation. Working conditions and environment 4 - agree 5 - strongly agree Work organisation employers views

39. 20% 35% 38% 39% 51% 51% 36% 38% 43% 5% 15% 17% 17% 29% 29% 30% 31% 36% 0% 20% 40% 60% 80% 100% Allowing teleworking damages team work and causes tension due to unfairness. Teleworking at home presents various risks for the employee responsibility for their work equipment and covering the costs related to working at home. Many employees lack sufficient self-discipline and sense of responsibility to work independently. In order for flexible working to be successful it would have to be a natural part of the organisation's work culture and not just an individually agreed exception. Employees are better motivated and more efficient when they have more say in their work organisation. Flexible working makes it more difficult to keep work and private life apart. If the nature of the work does not require fixed hours in the office then it is pointless to enforce it. Organisations that offer flexible working, including teleworking, are more attractive as employers. Managers should spend more time on assessing performance rather than enforcing fixed working hours. Pros and cons of flexible work organisation 4- agree 5- strongly agree Work organisation employees views

40. 24% 16% 21% 26% 41% 43% 47% 38% 32% 4% 7% 8% 10% 19% 21% 25% 43% 57% 0% 20% 40% 60% 80% 100% The majority of employees cannot be trusted with managing their own work organisation as they lack sufficient self-discipline and sense of responsibility. Allowing teleworking damages team work and causes tension due to a sense of unfairness. Allowing teleworking presents various risks for the employer, such as security risk, health and safety risk and loss of assets risk. Allowing flexible work organisation makes people and work process management significantly more complex. Giving employees more autonomy allows managers more time to deal with organisational matters instead of checking adherence to fixed working hours. Offering flexible working, including teleworking, improves the employers reputation, which in turn helps to recruit better candidates. Giving employees more freedom and responsibility to organise their own work improves their motivation and performance. In order for flexible work organisation to be successful it would have to be a natural part of the organisation's work culture and not just an individually agreed exception. With non-manual employees it is more important to assess their performance rather than enforce fixed working hours. Pros and cons of flexible work organisation 4 - agree 5 - strongly agree Work organisation employers views

41. GROSS WAGES AND SALARIES The Employers Salary Survey

42. Slides in the full version of the Salary Survey Report Average gross wages for 223 occupations Comprehensive pay reports for 75 individual occupations Gross monthly salary ranges (quartiles 25, 75; percentiles 10, 90; median) Internal pay differences in organisations Basic pay and variable pay 1510 2850 1330 2190 Gross monthly salary range Lowest 73% Average 100% Highest 142% Internal pay differences 88% 12% Share of base pay and variable pay in salary Variable pay Base pay

43. EMPLOYEE MOVEMENT AND SALARY EXPECTATIONS The Employees Salary Survey

44. Existing job and desired job movement of employees Existing net pay and desired pay for 320 occupations Desired pay by gender, age, educational level, etc. (on request) Slides in the full version of the Salary Survey Report 1000 800 900 2000 2000 2000 900 660 800 1550 1500 1450