But nation still languishes near the bottom, finds Towers Watson
Wages in the UK have improved for entry and middle-manager level employees helping the country to move it up the European pay league for 2014.
However, the Towers Watson Global 50 Remuneration Planning report revealed that country still sits close to the bottom of the top 15 European economies for entry level pay, despite moving above Spain and Italy.
Switzerland came top reporting entry-level pay at more than twice (£66,671 a year) what an equivalent UK worker could expect to earn (£27,199 a year). The UK lags significantly behind the rest of the top five (Denmark, Luxembourg, Norway and Germany) for entry-level salaries.
Middle-management pay in the UK, in terms of base-salary, is higher than that offered in the Netherlands, Austria and Ireland this year. But while the UK has moved up the table, base salaries are still more than £10,000 a year behind the top three (Switzerland, Luxembourg and Germany).
Darryl Davis, senior consultant in Towers Watson’s Data Services team, said: “While our latest gross salary data does show some positive movement for the UK, on the European level there still remains a considerable gap in gross salary terms between it and the continent’s highest wage markets. For the economy as whole, though, this isn’t necessarily a bad thing as it means UK wages are able to grow in a healthy way while remaining competitive in cost terms versus other Western European economies.”
The report also provides insight into how much ‘buying power’ employees in each country have, by taking into consideration taxes and cost of living. When these measures are taken into account, the salaries for UK employees look more competitive. Due to lower taxes and cheaper living costs than in many other European countries, entry-level professionals in the UK move up to 6th and middle managers rose to 4th place in terms of relative wealth, above France, the Netherlands, Spain and Italy in both cases.
Swiss workers consistently top the pay tables across all job levels with salaries more than 20 per cent higher than even the second-placed countries. As a result, even when taxes and cost of living are taken into account, Swiss workers still enjoy higher buying power than other European staff.
Carole Hathaway, global leader of Towers Watson’s Rewards practice, said: “Our most recent Global Workforce Study shows that base pay remains the number one consideration for individuals when they are deciding to join or leave a company. The 2014 pay league tables suggest that UK employers are responding to certain pay pressures in terms of their base salary within the constraints of a challenging economy. However, employers do have the opportunity to further increase the perceived value of their overall offer by enhancing the non-financial aspects of the deal such as career-advancement opportunities, learning and development programmes and flexible-work arrangements, and to communicate the deal more effectively to employees.”