- Laws of supply and demand outweigh the downturn’s impact on senior managers’ pay
- Management talent shortage in high-growth economies results in wide pay gap
- Middle Eastern managers have greatest spending power, Chile, Romania and Turkey also in top ten
PHILADELPHIA, PA December 8, 2009 - As the world emerges from the downturn, a new report by global management consultancy Hay Group finds that where there is a scarcity of senior management talent, the laws of supply and demand have outweighed the impact of the crisis on senior managers pay, leading to greater pay gaps. In terms of management spending power, the Gulf States still dominate the rankings, although Chile, Romania and Turkey are surprising hot spots for managers.
Hay Group’s “Global Management Pay Report” provides a snapshot of two key indicators of the global talent market: managerial spending power and the pay gap between management and clerical workers in over 55 countries.
Philip Spriet, managing director for reward information services Hay Group comments, “The disparity between managerial spending power in high and low growth economies is likely to increase over the coming year. The full brunt of the crisis has yet to filter down fully to managers’ spending power. Managers whose governments have increased public spending to help organizations weather the crisis are likely to experience a rise in tax and living costs, and will feel the real impact on their disposable income in the coming years.”
Spending power - who has the money?
As expected, the oil-rich, tax free states in the Middle East (which take rankings one to six in the Global Management Spending Power Index ) have much higher levels of managerial spending power than in the UK, US and other countries in Western Europe.
This disparity is made even more acute due to the adverse effects of the economic downturn on advanced economies along with heavier tax burdens and higher costs of living; indeed the US and the UK languish at 30th and 43rd respectively in the Global Management Spending Power Index.
The countries at the top of the table tend to benefit from relatively high salaries, where the supply of senior talent cannot meet the demand, and where there are very low or no income taxes. In other economies such as Chile (7), Turkey (10) and Brazil (16), the spending power is further boosted by a low cost of living.
Pay gaps - who is the fairest of them all?
At the top of the table is Nigeria where there is a high demand for managerial talent and a lack of local experience in professional management roles, particularly in a multinational context.
China ranks second in terms of largest pay gap. William Lo from Hay Group China comments, “The war for talent continues in China even during the downturn and we expect that the pay market for senior managers won’t cool down anytime in the near future.”
Philip Spriet, managing director for reward information services Hay Group comments, “This reflects the generally high availability of lower-skilled workers in these markets and competition for senior talent. With specialist skills in short supply and huge competition to attract highly qualified executives there is an increasing gap between managerial and clerical level workers in developing economies.”
The lower rankings of the Global Pay Gap Index suggest more equality within the labour market and include a large proportion of Nordic countries. Sjur Teigland, from Hay Group Norway comments, “In Norway’s egalitarian culture one would find it difficult to accept the sort of high differentials between top managers and other staff that we see in some other developed economies. So I am not surprised to see Norway as the bottom end when comparing salary gaps.”
Download report
Click here to download Global Management Pay report 2009.
For further information or to receive a copy of the full report, contact:
Mitch Kent
Global head of public relations
T: +1 215 861 2315
M: +1 215 820 5173
E: mitch.kent@haygroup.com
About Hay Group
Hay Group is a global consulting firm that works with leaders to turn strategies into reality. We develop talent, organize people to be more effective, and motivate them to perform at their best. With 86 offices in 47 countries and data in over 100 countries, we work with over 7,000 clients across the world. Our clients are from the public and private sector, across every major industry, and represent diverse business challenges. Our focus is on making change happen and helping organizations realize their potential.
For more information, please visit www.haygroup.com
