The pay gap between lower level employees and their senor manager counterparts in the UK has increased by 5.3% since 2008, while Europe has seen the smallest pay gap increase of 2.2%, according to research by Hay Group.
Its study, which surveyed more than 16 million job holders in 24,000 organisations across over 110 countries online, also found that the pay disparity between lower-level workers and senior managers has widened in every region globally since the recession began in 2008.
Lower-level employees compromise those holding graduate-entry positions, as well as clerical, supervisor or skilled manual roles, whereas senior manager roles are classed as heads of department or equivalent.
The research also found:
- Europe is the region where the greatest number of countries have experienced a decrease in the pay gap, with Switzerland, France and Poland recording decreases of 3.3%, 5.6% and 12.8% respectively.
- The pay gap has risen in twice as many countries as it is falling.
- In North America senior management pay has increased 7.2% compared to lower-level employees. .
Adam Burden, consultant at Hay Group, said: “Globally, the job level pay gap increase has accelerated since the recession. But this is not a purely post-recession issue; this is a complex trend that has been building for 30 years.
“We are seeing it impact different countries and regions in different ways as the influence of local attitudes to employment and pay is felt in each region.
“While the difference between the pay gap increase in Europe and the UK is attention-grabbing, it is not altogether surprising. Mainland Europe has a strong tradition of trade unions, which have helped maintain pay equality despite a sifting business landscape and economic fluctuations.
“In comparison, US organisations more frequently cut jobs, and asked the remaining senior mangers to expand their scope of work during the recession. Many of those who remained employed received a pay increase as compensation for their expanded role, leading in part to the widening job level pay gap.
“The pay gap has accelerated as globalisation has opened up workforces. In emerging markets, lower-level employees typically earn less than those in mature markets. [However], it is an increasingly international job market for senior-level employees.”
Burden continued: “The potential for a large job pay gap to cause discontent among the workforce is huge. Organisations need to be transparent with employees, and communicate why reward policies are in place.
“They should also invest in their training and developing programmes to upskill their workforces to meet the future demands of their businesses. Done properly, these solutions present an opportunity for organisations to navigate the pay gap and improve employee engagement.”