Latvia's wage growth second-lowest since 2017
Base salaries for employees staying in the same position rose 5.8% in Latvia over the past 12 months, less than in Lithuania but more than in Estonia. Experts expect even slower growth next year.
New data on the Baltic labor market shows that over the past 12 months, base salaries grew fastest in Lithuania at 7.1%, compared with 5.8% in Latvia and 5.6% in Estonia. These figures apply to employees who remained in the same position. Forecasts for the coming 12 months show a similar pattern: Lithuania expects 5.2% growth, Estonia 4.5%, and Latvia 4.2%.
When looking at the broader labor market — including new organizations, new hires, and employees who changed roles or were promoted — Latvia's monthly base salary level rose 4.9%, while total annual pay rose 4.8%. Growth varies by employee category: it is fastest among junior specialists and manual workers (5.5%) and slowest among function managers (2.6%).
A return to moderate growth
Juris Nīmants, head of Figure Baltic Advisory, says the market is returning to more moderate wage growth — such a low rate, excluding the Covid-19 period, was last seen in 2017. At the same time, wages continue to grow faster than productivity, meaning employers face growing pressure to find funding sources through process efficiency, automation, and artificial intelligence.
For the coming period, organizations forecast average base salary growth of 4.2% and total annual pay growth of 4.5%. Still, 89% of organizations plan to raise base salaries and 90% plan to raise total annual pay.
Labor shortages remain a challenge
65% of surveyed organizations consider a general shortage of workers a problem, and an equal share cite a shortage of highly qualified staff. Nine out of ten organizations offer training programs to employees. Inflation and heavy workloads are seen as problems by 59% of organizations, while 52% cite the need to boost productivity.
Gender pay gap widens
The overall average gender pay gap reached 18% this year, up from 14% last year. However, when comparing roles of equal value, the gap is 5.3%, and for identical roles, 3.2% — both slightly lower than last year. The study included data from more than 530 organizations covering about 100,000 job positions.
