Football's wage trends may seem extreme, but consider the pay differentials in your organisation, writes Duncan Brown
Pay statistics have attracted plenty of headlines recently, with the latest Office for National Statistics data confirming real wage cuts for most of us for a fifth consecutive year. Average annual earnings in the last month were up by just 0.8 per cent compared to Consumer Price Inflation of 2.1 per cent.
A lot of the debate over this unprecedented situation has centred on the disproportionate impact of the wage cuts, with further ‘hollowing out’ of the labour market and the impact of technology and globalisation depressing pay for low skilled jobs, while professional and executive pay has continued to increase as the economy recovers.
Citizens UK has just published a report contrasting soaring player wages in the Premier League with the ‘poverty wages’ paid to their (mostly female) contract staff, such as cleaners and catering assistants. It would apparently take a full-time cleaner at Manchester City 13 years to earn the £180,000 Yaya Toure makes in a week.
While I very much support upping low pay levels through a higher National Minimum Wage or Living Wage, I am not sure the previous analogy is that typical or helpful. On the basis of ‘like work’ I shouldn’t think the cleaners look at these footballers and feel that they should be paid the same. And Manchester City has committed to pay its contract staff the Living Wage level.
Perhaps a more accurate representation of the danger of what’s been happening in the UK pay market, where inequality has grown faster than in any other OECD country over the past 20 years, comes if we look at wider trends in the rewards of professional footballers.
In the bottom division, League 2, new figures show that average weekly pay of £747 is just over the national average earnings level. In 1992 – when the Premier League was started – the equivalent figure in League 2 was £320. Players in the top division then earned 3.7 times that. Today, as the value of the Sky TV contract has rocketed from £191 million to £1.7 billion, so Premier League wages now average an incredible £22,353 a week, 30 times League 2 earnings. And that’s without the image rights and other commercial endorsements, which can add up to 100 per cent to the earnings of players in the top flight. Even in the Championship (the old second division) annual wages are around what Toure and Wayne Rooney make in a week.
Football clubs are of course relatively unusual employers in many senses. But what are the general implications of this trend for UK employers as a whole? First, if you believe in internal talent management and home-grown leaders, you really need to think about, monitor and manage these pay relativities in your organisation and the alignment of pay and career progression. I have heard examples of pay-nothing promotions in the last couples of years, a short-sighted cost-saving from this perspective.
Second, wider staff engagement and motivation can be a major concern in organisations with extreme pay differentials. The managing partner of a major accounting firm told me that when he was a project manager, partners earned 7 or 8 times what he did. Now the multiple is over 20 times and he said that would have led him to feel exploited.
Maybe a more relevant question regarding the football club cleaners and caterers is why they don’t share in the team performance-related bonuses that the players also enjoy. And as for female footballers… well, that’s another blog