The report also examines the tax burden in each country, as well as the cost of living, to establish how much buying power employees get from their pay. This measure gives a ‘purchasing power’ comparison between different countries and an indication of what an employee’s net income will provide within their country of residence.
When this is taken into account, salaries for UK employees look more competitive as lower taxes and cheaper living costs make the country more affordable than many of its European neighbours. Once adjusted for purchasing power parity (PPP) to account for taxes and living costs, the wage of a typical entry level professional in the UK becomes £22,165, which sees the country climb five places to 8th highest in Europe, surpassing Norway, Denmark, Sweden and France.
Middle managers enjoy similar relative strength in their pay levels. The typical middle manager in the UK earns £58,833 gross a year, putting them in 10th spot in Europe, and that ranking lifts to sixth place and £42,690 on a PPP-adjusted basis. Only middle management staff in Luxembourg, Switzerland, Germany, Belgium and Ireland enjoy greater buying power than their counterparts in the UK.
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Hazel Rees, GB Leader for Willis Towers Watson’s Rewards Line of Business, said:,
The UK’s improved performance in the rankings, when purchasing power is taken into account, demonstrates the positive impact of a lower tax and cost-of-living burden on cash compensation in the UK compared to much of Continental Europe. This approach is also a driver behind some common differences in reward design practised in the UK versus the rest of Europe, such as the use of car allowances instead of grants and the comparatively lighter use of voluntary fringe benefits.
If UK companies are to stay competitive, however, available resources need to be better allocated in order to attract, motivate and retain their best employees as market conditions create increased competition for talent. While salary remains the main consideration for UK workers when deciding to join or stay with a company, our own research shows that employers continue to fall short in how they deliver pay programmes, including base pay and bonuses.
Switzerland was the country with the highest salaries across all levels, with base salaries of £53,024 for entry level professionals and £97,929 for middle management roles. Despite wages being substantially adjusted downward when taxes and the cost of-living are factored in, Swiss workers still have higher buying power than nearly all other Europeans, at £35,069 for entry level staff and £57,522 for middle managers.
Aphrodite is a creative writer and editor specialising in publishing and communications. She is passionate about undertaking projects in diverse sectors. She has written and edited copy for media as varied as social enterprise, art, fashion and education. She is at her most happy owning a project from its very conception, focusing on the client and project research in the first instance, and working closely with CEOs and Directors throughout the consultation process. Much of her work has focused on rebranding; messaging and tone of voice is one of her expertise, as is a distinctively unique writing style in my most of her creative projects. Her work is always driven by the versatility of language to galvanise image and to change perception, as it is by inspiring and being inspired by the wondrous diversity of people with whom paths she crosses cross!
Aphrodite has had a variety of high profile industry clients as a freelancer, and previously worked for a number of years as an Editor and Journalist for Prospects.ac.uk.
Aphrodite is also a professional painter.
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