Korn Ferry Hay Group Study Shows Mixed Salary Growth Across the Globe, Eight Years After Start of Great Recession
-- U.S. Sees One of the Poorest Salary Growth Recoveries of all Developed Nations; Canada Sees Best
--Emerging Markets See Highest and Lowest Recovery Rates
According to the study,
Adjusted for inflation, salaries in
Other developed nations experienced flat to modest salary growth, with
Emerging markets saw the best and the worst salary growth.
“While overall, global economists point to this recovery as one of the
worst in history, there are political, economic and social reasons for
the disparate salary fluctuations in different countries,” said
Unbalanced Salary Growth in U.S.: Lower-End Jobs See Nearly 15 Percent Drop
In terms of salary growth, employees with lower-paying/entry-level titles, such as clerical, network analyst, payroll coordinator or production line supervisor experienced 14.8 percent inflation-adjusted drop in wages on average since the start of the recession.
Those in professional mid-level roles, such as a brand/product manager or network administrator, fared much better with a 2 percent inflation-adjusted salary growth.
Senior managers, such as an IT manager or chief accountant saw a 3.5 percent salary growth on average.
“Imbalances in supply and demand are behind the differences in pay growth at different job levels in the United States,” said Frost. “For lower-level jobs, technology and offshoring are among the factors causing an oversupply of people – and driving weak pay growth. At the top end, key leadership and technical skills are in short supply, causing much stronger increases in pay.”
Salary Gaps by Level More Tempered in Other Developed Nations
The upward swing in salary increases for more senior level roles is not
nearly as dramatic in other developed nations compared to the U.S. For
example, in the
In some nations, people with lower-level jobs actually saw higher pay gains during the past eight years.
“Several factors help to achieve pay parity across levels in European nations,” said Frost. “Firstly, many governments regularly increase minimum wage to keep pace with inflation, and labor laws usually favor employee rights. Also, strong unions bargain on pay and conditions, and in recent years, public pressure has kept senior manager salaries in check amid a call for everyone to ‘share the pain’ on the road to economic recovery.”
About the Study
Pay data is drawn from Korn Ferry Hay Group’s PayNet database, which contains salary and job data for more than 20 million workers in more than 25,000 organizations across 110 countries. Economic data (CPI and GDP) is from the Economist Intelligence Unit.
Data shows the ‘real’ change (i.e. absolute change minus CPI inflation) in base salary median pay levels, from 2008 to 2016, averaged across three benchmark job levels (clerical/entry level, professional and senior management) for each country. We also show the change in GDP over the same period.
Editor’s Note: Infographic Available