The end-of-year challenge for the industry: How do we keep our employees motivated?

In an ever-changing economic landscape, starting from November 2023, IT companies are facing challenges related to tax modifications: the elimination of tax exemption on incomes exceeding 10,000 lei gross and the optional contribution to the second-pillar pensions, which has become optional for the period 2024-2028.

This has a significant impact on the IT industry, where approximately 80% of employees surpass the tax-exempt salary threshold, according to the data provided by the National Association of Software and Services Companies (ANIS). Moreover, the average net income in the IT industry was 10,419 RON in August 2023, as reported by the National Institute of Statistics.

With these measures in place, companies must discover new ways to retain their current employees while also attracting young talents.

Concerning Connections, where a significant number of employees are directly affected by the new tax regulations, the company has decided to absorb the additional salary costs, ensuring that the net incomes of team members are not negatively affected.

“We are aware that these changes can significantly impact our colleagues’ incomes. Therefore, to ensure that our team remains motivated, we have decided to shoulder the additional costs generated by these new tax provisions. We will cover the tax difference for our employees by adjusting gross salaries, and this step represents a firm commitment by our company towards our employees’ financial stability and, most importantly, providing a predictable work environment. At present, a significant percentage of our colleagues benefit from this measure that we have implemented internally. Regarding the optional contribution to the second-pillar pensions, this, too, will be compensated by the company,” stated Radu Marcu, co-CEO of Connections.

Meanwhile, some IT companies resort to restructuring and workforce adaptations to cope with the new economic conditions, as indicated by the BestJobs recruitment platform.

“Professionals in this field are very attentive to the benefits offered by employers. In light of the new tax measures, we believe that our proactive approach in compensating for the additional costs will play a crucial role in retaining and attracting top talents. Through this initiative, we aim to convey a clear message: our commitment and the well-being of our employees are our priorities, and investing in people is essential for long-term success.” added Radu Marcu.

The company currently employs over 350 individuals and has recently opened 10 new positions, all holding key roles with a high specialization in the field of technological competencies.

The job openings in recruitment can be found here.

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