Wage level in Kosovo increased during 2021: Implications for MSMEs

Based on the data of Kosovo Statistics Agency, the average salary (gross) in Kosovo increased to 484 Euro in 2021.

Despite a decrease in 2020, the opening of the economy after the pandemic in 2021 increased the overall level of salaries. Since the private sector consists of the highest number of employees in relation to the total number of employees in the country, by easing pandemic measures we witnessed an increase in average salaries to 484 Euro in the country-level.

On the other hand, the increase of the average salaries signals at least two elements: the economic growth of the country and increasing operating costs for the firms. Concerning the latter, business owners/managers of MSMEs should find ways to effectively manage the increase of payroll costs. Among other ways, the following might be considered as viable solutions:

Automate trivial task: For manual and labor-intensive activities, consider outsourcing some of them to sub-contractors outside the company which may cost cheaper then performing them in-house. Alternatively, invest in software and systems that can substitute the manpower and increase the efficiency.
Optimize employees’ schedule: Make a work plan which even if it doesn’t shorten the working schedule, at least is reduces overtime. Alternatively, you might consider hiring temporary or part-time employees and alleviate expensive costs of full-time employees.
Revise bonus schemes: Albeit is not a popular choice, revising bonus scheme is always an option in the face of rising costs or shrinking revenue. This might entail substituting financial bonuses with other non-financial rewards such as flexible working schedule, extra day-offs, more job autonomy, individualized consideration and feedback, etc.
Enhance the control and audit system: One of the main struggles for a growing MSME is to lose the control over the business functions or in total in the worst case. This starts a chain reaction in the system leading to inefficiency and lost workmanship. In order not to fall into this problem, the owner of a growing MSME must determine the activities to be delegated and then put a control and audit system instead of her/his previous personal efforts on controlling.