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Pay disparity between senior and junior staff has increased in every region worldwide since the start of the global recession in 2008.
That was one of the key findings of a latest report by Hay Group, which polled more than 16 million job holders in 24,000 organizations across more than 110 countries.
The report found the pay gap between lower level workers( comprising skilled manual, clerical, supervisor or graduate entry jobs ) and senior managers ( heads of departments or equivalent ) is now on the rise in as twice as many countries as it is falling (42 vs. 21 countries)
“The pay gap has accelerated as globalisation opened up workforces and lower level jobs are increasingly automated and off-shored. This reduces the number of jobs available and increases competition for those left, keeping pay down,” the report stated.
In contrast, pay was reported to be going up for senior managers where skills such as emotional intelligence, creative thinking and advanced judgement are in high demand and short supply. In addition, senior managers are increasingly being asked to take on more responsibilities and more complex work.
The report highlighted North America experienced a 7.2% increase in senior manager pay compared to lower level employees, and countries in Asia reported a 11.6% increase on average.
While China saw a 7.8% increase, pay gap between senior and junior staff actually decreased by 3.4%.
Europe saw the smallest change globally, with an average increase in the pay gap of only 2.2% since 2008. It was also the region with the greatest number of countries that have experienced a decrease in the pay gap, with Switzerland,France and Poland recording decreases of3.3%, 5.6%, and 12.8% respectively
“The potential for a large job pay gap to cause discontent among the workforce is huge,” Ben Frost,consultant at Hay Group, said.
“Organisations need to be transparent with employees and communicate why reward policies are in place. They should also invest in their training and development programmes to upskill their workforces to meet the future demands of their businesses.”