Mercer research: Employers in Western Europe give 2.7% pay rises to executives

Employers in Western Europe have given out executive pay rises that average 2.7%, but they are among the lowest levels in Europe, Middle East and Africa (EMEA), according to pay data published by Mercer.

The Total Remuneration Pulse Survey also found that employees in managerial roles have received higher pay rises in 2011 than those in executive positions.

In the UK, executives have received a 3% higher salary increase than the regional average and many of their Western European peers, but average increases remain far lower than those received by executives in Africa, the Middle East, and Central and Eastern Europe.

The research also found that salary increases were generally higher among employers in the service, consumer and high-tech industries, and lowest among the financial services and energy organisations.

Mercer’s data found that within organisations operating in the 16 Western European economies, executives were awarded average pay rises between 2% and 3%.

Salary increases in the 20 countries in Central and Eastern Europe averaged 5.8% but around 10% of respondents stated that they would be freezing staff salaries again in 2011.

However, organisations in Belarus, Kazakhstan and Ukraine reported the highest executive salary increases at 12%, 10% and 10% respectively.

High salary increases were also reported in Russia, Georgia, Azerbaijan, Turkey and Serbia, while elsewhere in the region executive pay rises ranged from 2% to 4%.

Executive salaries in the Middle East and Africa ranged from 4% to 14%.

Johan Ericsson, principal at Mercer, said: “Europe has patiently sat through several years of pay freezes so this data is a welcome indication that spring has come.

“However, the relatively low increases in Western Europe reflect the continued uncertainty in this market compared to other regions.

“We have also noticed two trends emerging as a result of the continued need to keep costs low: organisations are continuing to segment their employees and often weighting scarce resources towards ‘rainmaker’ employees, such as managerial staff.

“Organisations are also increasingly reliant on using non-financial forms of reward to motivate and retain their other employees.

“Given the impact that dissatisfied and unproductive employees can have on a business, it is important that organisations follow the guiding principals for reward: communicate well, administer efficiently to maximise results and ensure that governance is consistent.

“With these three elements in place, organisations can make the most of the resources that they have while continuing to motivate and engage their staff.”

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