Eight years on, UK employees experiencing lowest levels of wage growth in Europe
Following the financial crisis eight years ago, employees are still feeling the impact on their pay according to analysis by the Hay Group division of Korn Ferry. Adjusted for inflation, salaries in the UK have decreased by 0.1% on average since September 2008, meaning that despite Gross Domestic Product (GDP) growth of 7.9%, the UK has the worst salary recovery of the European nations surveyed.
Conversely, wages in Italy grew by 2.4 percent, while wages in Germany and France increased by 5 and 5.2% respectively. Across developed nations, the picture was mixed, with US wages decreasing by 3.1% on average, despite GDP growth of 10.2%, while Canadians are taking home on average 7.2% more than in 2008.
Benjamin Frost, Korn Ferry Hay Group’s global product manager said: “It looks like employees have had a bad time in the UK and US, but these statistics tell only one side of a complex global employment story. Yes, employees are taking home more in some European countries, but in the majority of cases, these have far higher unemployment rates than in the UK, for example. In Q4 2015, 5.1% of the UK’s total labor force was unemployed. In France the figure was 10% while in Italy 11.5 percent of potential employees were out of work.”
“However, in the UK, a lot of the job creation has occurred in low-paying sectors,” continued Frost. “We’re not seeing more jobs available in science and technology, it’s sectors such as retail that are fueling both the UK’s high employment rate, and suppressing 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. In the countries that are seeing tremendous salary growth, the issue is supply and demand.
“With countries like China witnessing a whopping 75.9 GDP growth since the beginning of the recession, universities and corporations simply can’t train people fast enough. This leaves an acute talent shortage and points to the reason skilled employees are seeing steep pay increases.”