Almost all HR departments in the companies are facing the task to offer adequate compensation policy – timely indexation of wages and salaries, offering compensation payments according to the change in cost of living in different regions. CESSI Cost of Living Index for Russian regions helps to solve these tasks. It reflects the change of prices for goods and services included into the consumer basket for different population groups and different categories of employees. It serves as comparative basis for evaluating cost of living differences between regions.
WHAT INDEX OF QUALITY OF LIFE (IQL) SHOWS
The IQL Index shows the cumulated time change of prices on goods and services included into the standard consumer baskets of different sub-groups of population. It allows to evaluate the impact of prices’ change on the standards of living. Consumer basket includes goods and services used by participants of population sub-groups in their regular life.
WHAT IS SPECIAL ABOUT IQL?
IQL takes into account the specific consumer basket for special sub-groups of population including employees of large companies, while standard cost of living indexes reflect average or minimal set of products for the population in general. IQL allows to estimate differences in the cost of consumer baskets between cities and to construct comparative index taking the Moscow as a reference point. The comparative Index is expressed in percentages of local consumer basket cost from Moscow reference point of 100%.
IQL for Russia is comparable with IQL Index calculated for different cities of Ukraine, Belarus, Kazakhstan, Azerbaijan and Uzbekistan.
IQL is calculated in Russian rubles, US dollars and in Euro. Subscribers get the retrospective historical data of IQL for the whole period of conducting this survey for particular city.
ECONOMIC RELEVANCE OF USING IQL
IQL is used by HR-departments and compensation and benefit units of domestic and international companies to conduct optimal indexation policy for salaries and wages, offering appropriate benefits and social services for their employees in different regions and those moving to different locations.
CESSI’s IQL is based on consumer basket, which is relevant for specific groups of employees including employees of large companies therefore it offers information to conduct effective and timely changes, to implement flexible compensation policy. It helps to take into account the consumers needs of employees but also avoids unnecessary overpayment, optimizing the cost of labor force for employees.
We conduct regular monitoring of prices for different sets of products and services in retail outlets and service organizations, which are relevant for particular target groups. The collected information is compared with previous time period making estimates of the price change for particular products/ services or group of products.
Price changes for each product/ set of products are weighted proportionate to the cost share of a product in general spending matrix. Index shows the differences between regions and social-subgroups taking into account not just general price change but also the type of products consumed by particular groups, weight of products in total spending and sources (type of retailers) of product provision for a consumer group. IQL Index is targeted for particular social groups which are the most important for employers rather than based on simple averages for total population with diverse needs, budget, style of life and consumer habits.