A new pay world order

New research reveals that emerging economies in Asia, eastern and southern Europe are outstripping developed Western countries as new pay 'hot spots'.

by The Hay Group
Last Updated: 23 Jul 2013

The study, carried out by consultancy Hay Group, compares salary, bonus, tax and cost of living information at senior management level across 29 countries. And surprisingly, it is Turkey that is coming top of the league, with senior managers earning an average net salary equivalent to €79,000.

Hot on their heels is outsourcing superpower India, with managers taking home the equivalent of €77,700. Russia, Brazil and Poland follow in third, fifth and sixth place respectively.

The most conspicuous absentee from this group is China, which ranks 26th with average salaries of €42,200. "As an emerging economy, Chinese salary levels remain pegged at a low level, even accounting for the effect of China's undervalued currency on international comparisons," says Ben Frost, author of the Hay Group study.

Western Europe also fares poorly – the UK is 23rd in a league of 29, France 20th, and Scandinavian countries are at the bottom of the table with Finland and Sweden ranking 28th and 29th respectively. The US rank 13th, behind Spain, Japan, Portugal and Ireland.

"This should make sobering reading for companies in Western Europe and the US, who face not only an increasing competitive threat from buoyant new economies, but a cross-border war for managerial talent," says Frost.

Switzerland, Germany and Japan are the only major western economies making it in the top 10, confirming once again Switzerland's status as a high-salary nation. Japan has also managed well in the face of recent economic stagnation. "For those senior managers who have retained their jobs, salaries are holding up well and buying power is further boosted by recent years of price deflation," observes Frost.

"Companies operate in an increasingly open and competitive global economy," he continues. "Our research shows that emerging economies are offering executives significantly higher disposable incomes than the Old World – which is likely to make these locations an attractive prospect for senior talent."

Source: The Hay Group

Review by Emilie Filou

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