UK pay stagnates for entry-level and clerical roles

Average pay for UK employees in clerical and entry-level professional roles stagnated in 2012, while more experienced professionals saw average pay rises of 6%, according to research by Towers Watson.

Its Global 50 remuneration planning report provided a breakdown of pay movements by job level, looking at the pay and benefits information for 50 positions across 57 countries worldwide.

It found that pay for clerical roles and entry-level roles averaged a 0 and 1% rise, respectively, which translated to a pay cut of 2.8% and 1.9%, respectively, when accounting for inflation.

More senior employees, such as experienced professionals, received more substantial pay increases on average, at nearly 6%, or more than 3% above inflation. Middle managers saw their pay move up more modestly, at just under 2%, a real-term reduction of nearly 1%.

Darryl Davis, senior consultant in Towers Watson’s data service division, said: “There is no question that organisations have had their reward budgets squeezed this year and many are opting to use them to offer meaningful rewards to those they feel are likely to add the most value to the company, rather than spreading them thinly across the whole organisation.”

Pay movements in Western Europe broadly matched those in the UK in 2012, with Austria, Germany, Ireland, Italy, the Netherlands, Portugal and Spain all experiencing repressed pay movements and real-term pay cuts for clerical staff and entry-level roles. However, in France, there were average pay increases of nearly 5% for clerical and more than 3% for entry-level professionals.

Outside Western Europe, Canada and Japan benefited from double-digit pay increases and very low inflation, providing substantial base-pay increases at almost all levels. Conversely, in China, market median salary increases have slowed substantially and have not necessarily kept pace with inflation. Even higher inflation in Brazil (over 5%) has reduced the impact of relatively high pay rises, with many workers facing a real-income reduction despite increases in median salaries above those seen in Europe and the United States.

Davis added: “Within the context of Western Europe, the UK is broadly in line with other countries in offering muted base-pay increases that struggle to match inflation.

“Corporate confidence is higher in many countries outside of Europe and this has led to significantly higher pay rises, particularly in countries such as Canada, the US, India and Japan.”

Variable pay, such as bonuses and long-term incentives, were highest for entry-level professionals, who received nearly 60% increases on 2011. Middle management saw bonus levels reduced by almost 20%.

In France, bonus awards were up to 100% higher for junior clerical and entry-level roles, and increased by nearly 50% for middle management.

Carole Hathaway, rewards practice leader for Europe, Middle East and Africa (EMEA) at Towers Watson, said: “Variable pay provides a way for organisations to protect themselves against increasingly high-fixed payroll costs.

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“This is a popular option in uncertain economic climates, because employees can be rewarded once the organisation has a firm picture of its own financial performance and stability.

“Consequently, we are seeing more emphasis on variable pay programmes being used to make up for lower base-pay increases.”