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The pay gap between lower-level employees and senior managers has grown in every region of the world since 2008.
This is according to Korn Ferry research, which draws on data from Korn Ferry’s pay database, that shows the pay gap increasing in 77% of 58 countries in the analysis.
The Korn Ferry analysis points to several reasons for the widening gap.
“At the lower end of these labor markets, automation and offshoring means that enhanced productivity results in an abundance of available labor – more people than jobs – which slows the increases in pay,” said Bob Wesselkamper, Korn Ferry’s global head of rewards and Benefits solutions. “Meanwhile, at the higher end, there’s a shortage of people with important hard skills and proven experience, such as STEM. Organizations also have to compete for senior managers with in-demand soft skills, such as emotional intelligence, creative thinking and the ability to manage large and complex teams. Therefore, pay at this level is going up – and is likely to increase faster than other jobs.”
While a widening gap is the norm in the majority of nations, there are areas where the gap is narrowing.
Following is a breakdown by region:
North America: United States sees larger increases than Canada
The United States saw a pay gap growth of 12%, which was significantly higher than the regional average of 9%, while its neighbor, Canada, saw a relatively low pay gap growth of 5%.
Europe: Majority of countries where gap is narrowing are in this region
On average, the pay gap increase is only 2% in the region. Of the 13 countries that have reduced the pay gap between lower-level and higher-level employees, most are in the European region. Notable among these are France (-6 percent), Italy (-3%), Poland (-13%), and the Russian Federation (-3%). The United Kingdom’s pay gap increased by 9%, with only three countries in Europe recording higher increases than the UK; Portugal (10%), Greece (11%) and Ukraine (79%).
Middle East and Africa see most dramatic increases in pay gap
The pay gap increase between lower-level and higher-level employees is significantly larger in the Middle East and Africa than in other regions, with increases of 58% and 49% respectively. Six of the 10 countries with the biggest increase in their pay gap are in the Middle East. This includes Bahrain, which, at 118%, saw the largest increase of any country included in the study.
Latin America Narrows the Pay Gap in Two Countries
Most countries in Latin America experienced an increase in the pay gap, with an average 13% increase in the region. Colombia saw the highest increase in pay gap of 32%. Argentina and Venezuela were the exceptions for the region, with narrowing pay gaps of 2% and 18% respectively.
Asia Sees Consistent Growth Across Countries
Eight out of the nine countries in Asia saw moderate increases in their pay gaps between lower-level and higher-level employees. The average increase in the region is 15%. India bucks this trend with a dramatic increase of 66% in the pay gap.
The Pacific Has Second Smallest Increase in Average Pay Gap
With an average of 7%, the Pacific saw the second smallest average increase in pay gap, after Europe’s average increase of 2%. Australia saw an increase of 8 percent and New Zealand saw an increase of 5%.