“Smartly organized work from the company’s central administration to store and various department managers, the diligence and organization of smart employees continue to enable “Norfa” to remain a leader – the retail chain paying the highest salaries in the country,” states Dainius Dundulis, chairman of the board of UAB “Norfos mažmena,” which has 161 stores in Lithuania, and general director of production and logistics at UAB “Rivona.”
Read more On the train – Juozas Statkevičius’s outburst of anger: «Hello!»
Even the lowest earners earn significantly more
According to the latest “Sodra” data, published based on wages paid in June, the median insurable income of employees insured for the entire calendar month at “Norfa” was 2,107 Eur (numbers rounded to euros here and below). This median, as is usually the case every month, was the highest compared to other major retail chains in the country.
The “Lidl” chain lagged behind the median paid to “Norfa” employees in June by 60 Eur (about 3%), with a median of 2,047 Eur. The median for employees of other retail chains was significantly lower: in the “Iki” chain it was 1,589 Eur (518 Eur or 33% less), in “Maxima” – 1,553 Eur (-554 Eur or -36%), in “Rimi” – 1,495 Eur (-612 Eur or -41%).
The median salary most realistically reflects the wages of the majority of employees, e.g., in retail companies – the majority of those working in stores and serving customers. The median is obtained by excluding the top 25% and bottom 25% of salaries in the company and taking the middle 50% of employees’ wages.
Analyzing the so-called 25% quantile, i.e., the income level earned by employees at the 25% lowest earning boundary, “Norfa” employees’ wages stand out significantly. In this retail chain, it was 1,726 Eur. “Lidl” also lagged behind “Norfa” in this indicator – it was 1,558 Eur. The 25% quantile of other retail chains was significantly lower and quite close to each other: “Maxima” – 1,392 Eur, “Iki” – 1,383 Eur, “Rimi” – 1,328 Eur.
How the overall average salary is distorted
“It is true that employees of “Norfa” stores located in the same city can earn differently. This is because wages depend on how managers allocate and organize work, and how smartly and efficiently employees perform it. Visiting “Norfa” stores weekly in various regions of the country, I notice that not all managers and employees manage to perform their duties optimally. Customers also notice this, and they prefer to visit stores where they are best served, and the financial success of stores and employees’ earnings largely depend on customer flow. By the way, it is usually easiest to attract the necessary employees to the most efficient stores, where staff turnover is the lowest,” summarizes the head of “Norfa.”
D. Dundulis draws attention to another “Sodra” published indicator – the standard deviation. The larger this number, the more obvious it is that there are several employees in the company who receive exceptionally high salaries compared to most workers.
According to “Sodra” data, the highest standard deviation of salaries for employees working throughout June was at “Lidl” – as much as 3,625 Eur or 4.6 times higher than the lowest recorded in the “Norfa” network (787 Eur). The standard deviation in June was 2,319 Eur at “Iki,” 936 Eur at “Rimi,” and 931 Eur at “Maxima.”
It is understandable that a large standard deviation significantly distorts another publicly announced indicator – the overall average salary. When it is large, it appears that all employees in the company receive a good average salary, although in reality the lion’s share goes to just a few managers.
One chain stands out with a special line
By the way, tax specialists analyzing “Sodra” data noted that “Lidl” is the only major retail chain that stands out with a separate line: “The average income of individuals receiving income under copyright contracts, from sports or performer activities, royalties, and other wages was 17,466.67 Eur.” According to them, companies “optimize” taxes with such payments instead of wages.
“By paying remuneration not under employment contracts but, for example, under individual activity certificates, significantly lower taxes are paid to the state. As well as by giving gifts up to 200 Eur instead of wages, which are completely tax-free. With 3,000 employees, it is possible to legally “avoid” about 400,000 Eur in taxes per year in this way,” calculates D. Dundulis. “Norfa” is not inclined to use such tricks.”
According to him, “Norfa” has already planned innovations that, once implemented, are expected to further increase the retail network’s gap in labor productivity and, accordingly, wages for a larger number of employees.
“Not only are innovations planned, but preliminary results for July and last year’s data allow us to state that the medians for July and August may exceed a record number – surpassing 2,200 Eur,” forecasts the head of “Norfa” regarding the wages of the majority of employees.
Read more Can broccoli help protect against cancer? The answer lies in their preparation
According to “Sodra” data, the annual average salary at “Norfa” grew by 9%.
