Pay in 2013: Mixed salary forecasts reveal two-speed Europe

PAY DATA

Pay in 2013: Mixed salary forecasts reveal “two-speed” Europe

Workers in stagnating economies across Europe can expect only modest salary rises in the new year, whilst the region’s emerging markets will see wages rocket, according to the latest pay forecast data from global management consultancy, Hay Group.

As European countries continue to feel the effects of the euro crisis, average pay rises across the region will be subdued in 2013 - 3.3% compared with 5.5% in 2012. But these average figures mask some marked differences and a “two-speed” trend in Europe.

• Across Western Europe, many developed countries will only marginally increase pay next year. And, of those that plan to increase pay, nearly two-thirds will fall below the European average.
• Greece and Ireland will be particularly hard hit (zero wage growth), and increases in Germany, UK (both 3%) and France (2.5%) will be subdued.
• Yet in Europe’s emerging countries, pay will climb significantly next year, with fast growing economies such as Ukraine (10%), Russia (9%), and Turkey (8%) bucking the trend with inflated pay increases.

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Global state of pay

• Latin American firms are set to be the big spenders of 2013, with average pay rises of 9% expected across the region.
• Venezuela will enjoy the highest pay increases (29%) in the region (and globally) and firms in Argentina will also implement considerable wage hikes (24.5%) – driven largely by rising inflation.
• At the other end of the spectrum, pay in North America will climb by just 2.9% – the lowest of any global region – with Europe not far behind (3.3%).
• In Asia, pay will rise by some 7.5% in 2013 and, interestingly, the "two-speed" growth trend apparent in Europe is mirrored in the region, as wage rises in the emerging generation of high growth Asian economies (e.g. Vietnam: 12.8%; Indonesia: 10.6%; the Philippines: 8%; and Malaysia: 6.2%) outstrip those of their colleagues in more developed countries (e.g. Japan: 2%).
• China is the biggest surprise, as the intensifying “war for talent” will see wage hikes of 9.5% in 2013, despite slower economic growth (up 1.1% on last year).
• Organisations in Africa and the Middle East are also planning significant pay rises next year (5.2% on average).

A final word

“Employees in developed markets face a tough year ahead, with pay rises falling behind – or barely outstripping – inflation. In times of slow growth, organisations in these countries are keen to minimise costs and drive productivity. However, they must still ensure that staff are rewarded appropriately and that remuneration budgets are used wisely – leaders must communicate effectively with staff and be creative with the benefits on offer.” - Ben Frost, global product manager, Hay Group.

Want to know more?

The data was drawn from Hay Group PayNet which contains data for more than 14 million job holders in 20,000 organisations across more than 100 countries. For more information visit www.atrium.haygroup.com.

For full details of the global salary forecasts for 2013, see the supporting infographic: http://bit.ly/11SZAeJ.

Hay Group is a “global management consulting firm that works with leaders to transform strategy into reality”. It has over 2,600 employees working in 85 offices in 49 countries. For more information contact your local office through www.haygroup.com.