INTERNATIONAL GEOGRAPHIC SALARY DIFFERENTIALS GLOBAL EDITION

Transcription

1 H E A LT H W E A LT H C A R E E R 2016 SA INTERNATIONAL GEOGRAPHIC SALARY DIFFERENTIALS GLOBAL EDITION M PL E

2 PUBLICATIONS DIRECTOR Samantha Polovina CREATIVE DIRECTOR Stefani Baldwin PRODUCT MANAGER Chrisy Wilson PRODUCTION MANAGER Sumit Bajaj In today s competitive race to attract and retain highly skilled global talent, organisations require current, in-depth information on everything from local statutory benefits, to salary trends, to managing a diverse workforce. Learn about our extensive product lineup at WE WANT TO HEAR FROM YOU! We love getting feedback from our clients on how we can improve our publications. We also make every effort to promptly answer any questions you may have about our data or analysis. PROJECT MANAGER Rahi Sardana ANALYSTS Deepak Gaur Divya M Sunil Kaushal Vishal Singla WRITERS Aashi Choudhary Virginia McMorrow GRAPHIC ARTISTS Ashish Mathew Vishal Kapoor COPYEDITOR Shubham Bhatnagar SAMPLE Take a moment and share your thoughts with us. For information about your order or other Mercer products, contact your nearest Mercer office: ASIA Singapore Tel: hrsolutions.ap@mercer.com AUSTRALIA Sydney Tel: customerservice@mercer.com CANADA Toronto Tel: info.services@mercer.com EUROPE Poland Tel: client.services.europe@mercer.com LATIN AMERICA Argentina Tel: client.services.la@mercer.com UNITED STATES Louisville Tel: surveys@mercer.com Published by: MERCER 1166 Avenue of the Americas, New York, New York 10036, United States Condition of Sale Copyright All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or be transmitted in any form or by any means, electronic or mechanical, photocopying, recording or otherwise, without the prior written permission of the publishers. No responsibility for loss occurring to any person acting or refraining from acting as a result of the material in this publication can be accepted by the authors or the publishers. 2 International Geographic Salary Differentials Global

3 ABOUT DATA MINING & INSIGHTS SA In today s competitive race to attract and retain highly skilled global talent, organisations require current, in-depth information on everything from local statutory benefits, to salary trends, to managing a diverse workforce. Through Mercer s own extensive global presence, we collect and analyse data and insights that help companies take the actions necessary to support their human capital strategies. You can order any of the publications below by clicking on the title links or by visiting Global Car Policies Global Compensation Planning Report Global Diversity and Inclusions Handbook M Compensation Handbook H E A LT H W E A LT H H E A LT H W E A LT H C A R E E R 2016 SHORT-TERM INCENTIVES AROUND THE WORLD International Geographic Salary Differentials Talent All Access Portal Subscription Services International Living Wage Report 3 Short-Term Incentives around the World Total Employment Costs around the World E 2016 Mercer LLC. PL Worldwide Benefit & Employment Guidelines HR Management Terms Global Pay Summary CAREER I N T ER N AT I O N A L LIVING WAGE REPORT 2015 HR Atlas Asia Pacific Global Mobility Handbook International Geographic Salary Differentials Global

4 CORRESPONDENCE 2 DATA MINING & INSIGHTS 3 INTRODUCTION 5 FIVE QUESTIONS ON COMPENSATION MAKING SENSE OF DIFFERENTIALS TABLES SAMPLE TABLE OF CONTENTS 10 United States 207 Denmark 433 Spain 697 Uruguay 215 Egypt 441 Sweden 705 Venezuela 223 Estonia 449 Switzerland 713 GEOGRAPHIC SALARY DIFFERENTIALS: ASIA PACIFIC 231 Finland 457 Tunisia 721 France 465 Australia 232 Germany 473 Ukraine Kiev China Beijing 240 Ghana 481 United Arab Emirates 745 SUMMARY OF KEY FINDINGS 15 Hong Kong 248 Greece 489 United Kingdom 753 Pay rankings 16 India 256 Hungary 497 DOMESTIC SALARY DIFFERENTIALS 761 Gross pay progression analysis 25 Indonesia 264 Ireland 505 Brazil 762 Cost-of-living and quality-of-living Japan 272 Israel 513 Canada analysis Malaysia 280 Italy 521 Mexico 764 International purchasing power New Zealand 288 Jordan 529 United States comparison Pakistan 296 Kazakhstan Almaty 537 Australia 766 Gross salary index 52 Philippines 304 Kenya 545 China 767 WORLDWIDE SALARY COMPARISONS 57 Singapore 312 Latvia 553 India 768 GEOGRAPHIC SALARY South Korea 320 Lebanon 561 Japan DIFFERENTIALS: AMERICAS Sri Lanka 328 Lithuania 569 South Korea 770 Argentina 87 Taiwan 336 Luxembourg 577 France 770 Bolivia 95 Thailand 344 Moldova 585 Italy 771 Brazil 103 Vietnam 352 Morocco 593 Poland 772 Canada 111 GEOGRAPHIC SALARY Netherlands 601 Russia 773 Chile 119 DIFFERENTIALS: EUROPE, MIDDLE 360 Nigeria 609 Spain 774 Colombia 127 EAST, AND AFRICA Norway 617 Turkey 775 Costa Rica 135 Algeria 361 Oman 625 United Arab Emirates 775 Dominican Republic 143 Angola 369 Poland 633 United Kingdom 776 Ecuador 151 Austria 377 Portugal 641 METHODOLOGY 777 Guatemala 159 Azerbaijan 385 Romania 649 Data Sources 784 Mexico 167 Bahrain 393 Russia Moscow 657 GLOSSARY 788 Panama 175 Belgium 401 Saudi Arabia 665 ABOUT MERCER 792 Peru 183 Bulgaria 409 Serbia 673 Puerto Rico 191 Croatia 417 Slovakia 681 Trinidad and Tobago 199 Czech Republic 425 Slovenia 689 Turkey Mercer LLC. 4 International Geographic Salary Differentials Global

5 SAMPLE INTRODUCTION Geographic salary differences generally represent the market-driven pay variations between locations domestic or international. Multinational companies, with employees in different geographic areas, often implement location pay differentials in their salary scales. Such geographic salary differentials can have a major impact on evaluating compensation plans for employers, who have to consider these pay level differences when pricing the same job in different markets. Numerous factors influence the level of pay within a country, such as the availability (supply and demand) of qualified talent. If that talent is scarce, pay levels are higher. The competitive market also plays a significant role, and employers need to determine their desired pay position in that market. Do they want to be perceived as aggressively competitive or just one of the peers? Some organisations offer pay levels that may be lower than the general market, but their noncash benefit levels are higher or the mix of their base salary and incentives is different than that of their peers. The general economy of the location, along with cost of living and standard of living, affect salary levels, as well. Another variable is the career level required to staff a new operation (or expanded one), which can also have a large impact on the bottom line. For example, if the majority of the workforce falls into lower levels of the organisation, the variation in salary between two locations may not be sufficiently different to influence the company s decision either way. But other factors may come into play, such as the local economy, quality of living, and others. However, if higher-skilled employees are necessary for example, engineers wider variations in pay between two locations may lead to total employment costs (the sum total of pay, benefits, mandatory contributions, and other components) that could favour one location over another. Consequently, knowing the pay levels in different locations helps employers control costs, while ensuring adequate, competitive pay as per the respective market standards. Management may choose a lower-cost location due to significant geographic differentials in pay or accept the higher costs and select the initial desired location. Accurate information is key to making sound, informed, rational decisions that align with the company s strategic objectives and culture Mercer LLC. 5 International Geographic Salary Differentials Global

6 SAMPLE SUMMARY OF KEY FINDINGS MEAN-TO-MEAN, COL INDEX, 2015 (NEW YORK CITY=100) COST OF LIVING ANALYSIS, 2015 METHODOLOGY: COST-OF-LIVING AND QUALITY-OF-LIVING ANALYSIS TABLE The COL index varies according to two variables: currency fluctuation and price movement in the home and host locations. For example, if a company wants to relocate an employee from New York City (US) to Geneva (Switzerland), factoring in the COL alone,, the company would need to pay 21% higher than what the employee would receive in New York to neutralise the impact of a higher living cost in the host city. However, this example only takes one component of an expatriate relocation into account, and other items such as tax and housing must also be considered in the final package. Note: COL is just one factor to consider for international assignments and relocation. A mean-to-mean index is a comparison of the mean prices (the average of the price range of each item) in the base city to host city. As a result, this index, which is not biased, is the best indicator of overall differences in prices between two cities, as it compares the average price range for each item both at home and abroad. TOP 5 RANK Geneva, Switzerland COL Index 121 Caracas, Venezuela COL Index 364 COL Index Singapore Beijing, China Beijing Luanda, Angola Hong Kong, Hong Kong COL Index 117 Seoul, South Korea COL Index 113 Note: Singapore, China, and Angola are at the 3 rd position due to having the same value. BOTTOM 5 RANK Chisinau, Moldova COL Index Kiev, Ukraine Kiev COL Index 67 Belgrade, Serbia COL Index La Paz, Bolivia Bogota, Colombia Bucharest, Romania COL Index 68 5 Algiers, Algeria Tunis, Tunisia Budapest, Hungary COL Index 69 Note: Bolivia, Colombia, and Romania are at the 4 th position; and Algeria, Tunisia, and Hungary are at the 5 th position due to having the same value Mercer LLC. 35 International Geographic Salary Differentials Global

7 SAMPLE GEOGRAPHIC SALARY DIFFERENTIALS: LATVIA

8 SAMPLE GEOGRAPHIC SALARY DIFFERENTIALS LATVIA ANNUAL MEDIAN TOTAL CASH AND DIFFERENTIALS, 2015 GROSS PAY TOTAL CASH (EUR) 74,103 53,836 39,112 TOTAL CASH (USD) 83,214 60,455 43,921 AMERICAS, DIFFERENTIALS (%) Argentina Bolivia Brazil Canada Chile Colombia Costa Rica Dominican Republic Ecuador Guatemala Mexico Panama Peru Puerto Rico Trinidad and Tobago United States Uruguay Venezuela ASIA PACIFIC, DIFFERENTIALS (%) Australia China Beijing Hong Kong India Indonesia Japan Malaysia NET PAY (SINGLE, NO CHILDREN) 53,337 37,731 27,161 59,895 42,370 30, NET PAY (MARRIED, TWO CHILDREN) 54,703 39,098 28,527 61,429 43,905 32, METHODOLOGY: Differentials are expressed as percentages. A positive differential indicates that pay in the compared country is greater than the base country, while a negative differential indicates the reverse. To compute the pay in the compared country, add 100 to the differential and divide the result by 100. Then multiply the resulting factor with the base country pay Mercer LLC. 553 International Geographic Salary Differentials Global

9 GEOGRAPHIC SALARY DIFFERENTIALS LATVIA SAMPLE GROSS PAY TOTAL CASH (EUR) 74,103 53,836 39,112 TOTAL CASH (USD) 83,214 60,455 43,921 New Zealand Pakistan Philippines Singapore South Korea Sri Lanka Taiwan Thailand Vietnam EUROPE, MIDDLE EAST, AND AFRICA, DIFFERENTIALS (%) Algeria Angola Austria Azerbaijan Bahrain Belgium Bulgaria Croatia Czech Republic Denmark Egypt Estonia Finland France Germany Ghana Greece ANNUAL MEDIAN TOTAL CASH AND DIFFERENTIALS, 2015, CONTINUED NET PAY (SINGLE, NO CHILDREN) 53,337 37,731 27,161 59,895 42,370 30, NET PAY (MARRIED, TWO CHILDREN) 54,703 39,098 28,527 61,429 43,905 32, METHODOLOGY: Differentials are expressed as percentages. A positive differential indicates that pay in the compared country is greater than the base country, while a negative differential indicates the reverse. To compute the pay in the compared country, add 100 to the differential and divide the result by 100. Then multiply the resulting factor with the base country pay Mercer LLC. 554 International Geographic Salary Differentials Global

10 GEOGRAPHIC SALARY DIFFERENTIALS LATVIA SAMPLE GROSS PAY TOTAL CASH (EUR) 74,103 53,836 39,112 TOTAL CASH (USD) 83,214 60,455 43,921 Hungary Ireland Israel Italy Jordan Kazakhstan Almaty Kenya Lebanon Lithuania Luxembourg Moldova -43 Morocco Netherlands Nigeria Norway Oman Poland Portugal Romania Russia Moscow Saudi Arabia Serbia Slovakia Slovenia Spain Sweden Switzerland ANNUAL MEDIAN TOTAL CASH AND DIFFERENTIALS, 2015, CONTINUED NET PAY (SINGLE, NO CHILDREN) 53,337 37,731 27,161 59,895 42,370 30, NET PAY (MARRIED, TWO CHILDREN) 54,703 39,098 28,527 61,429 43,905 32, METHODOLOGY: Differentials are expressed as percentages. A positive differential indicates that pay in the compared country is greater than the base country, while a negative differential indicates the reverse. To compute the pay in the compared country, add 100 to the differential and divide the result by 100. Then multiply the resulting factor with the base country pay Mercer LLC. 555 International Geographic Salary Differentials Global

11 GEOGRAPHIC SALARY DIFFERENTIALS LATVIA SAMPLE GROSS PAY TOTAL CASH (EUR) 74,103 53,836 39,112 TOTAL CASH (USD) 83,214 60,455 43,921 Tunisia Turkey Ukraine Kiev United Arab Emirates United Kingdom ANNUAL MEDIAN TOTAL CASH AND DIFFERENTIALS, 2015, CONTINUED NET PAY (SINGLE, NO CHILDREN) 53,337 37,731 27,161 59,895 42,370 30, NET PAY (MARRIED, TWO CHILDREN) 54,703 39,098 28,527 61,429 43,905 32, METHODOLOGY: Differentials are expressed as percentages. A positive differential indicates that pay in the compared country is greater than the base country, while a negative differential indicates the reverse. To compute the pay in the compared country, add 100 to the differential and divide the result by 100. Then multiply the resulting factor with the base country pay Mercer LLC. 556 International Geographic Salary Differentials Global

12 SAMPLE GEOGRAPHIC SALARY DIFFERENTIALS LATVIA ANNUAL MEDIAN TOTAL CASH AND DIFFERENTIALS, 2015 GROSS PAY PARA- TOTAL CASH (EUR) 27,041 18,917 13,233 9,257 TOTAL CASH (USD) 30,366 21,242 14,860 10,396 AMERICAS, DIFFERENTIALS (%) Argentina Bolivia Brazil Canada Chile Colombia Costa Rica Dominican Republic Ecuador Guatemala Mexico Panama Peru Puerto Rico Trinidad and Tobago United States Uruguay Venezuela ASIA PACIFIC, DIFFERENTIALS (%) Australia China Beijing Hong Kong India Indonesia Japan Malaysia NET PAY (SINGLE, NO CHILDREN) PARA- 18,842 13,244 9,327 6,586 21,159 14,872 10,474 7, NET PAY (MARRIED, TWO CHILDREN) PARA- 20,209 14,610 10,693 7,953 22,694 16,406 12,008 8, METHODOLOGY: Differentials are expressed as percentages. A positive differential indicates that pay in the compared country is greater than the base country, while a negative differential indicates the reverse. To compute the pay in the compared country, add 100 to the differential and divide the result by 100. Then multiply the resulting factor with the base country pay Mercer LLC. 557 International Geographic Salary Differentials Global

13 GEOGRAPHIC SALARY DIFFERENTIALS LATVIA SAMPLE GROSS PAY PARA- TOTAL CASH (EUR) 27,041 18,917 13,233 9,257 TOTAL CASH (USD) 30,366 21,242 14,860 10,396 New Zealand Pakistan Philippines Singapore South Korea Sri Lanka Taiwan Thailand Vietnam EUROPE, MIDDLE EAST, AND AFRICA, DIFFERENTIALS (%) Algeria Angola Austria Azerbaijan Bahrain Belgium Bulgaria Croatia Czech Republic Denmark Egypt Estonia Finland France Germany Ghana Greece ANNUAL MEDIAN TOTAL CASH AND DIFFERENTIALS, 2015, CONTINUED NET PAY (SINGLE, NO CHILDREN) PARA- 18,842 13,244 9,327 6,586 21,159 14,872 10,474 7, NET PAY (MARRIED, TWO CHILDREN) PARA- 20,209 14,610 10,693 7,953 22,694 16,406 12,008 8, METHODOLOGY: Differentials are expressed as percentages. A positive differential indicates that pay in the compared country is greater than the base country, while a negative differential indicates the reverse. To compute the pay in the compared country, add 100 to the differential and divide the result by 100. Then multiply the resulting factor with the base country pay Mercer LLC. 558 International Geographic Salary Differentials Global

14 GEOGRAPHIC SALARY DIFFERENTIALS LATVIA SAMPLE GROSS PAY PARA- TOTAL CASH (EUR) 27,041 18,917 13,233 9,257 TOTAL CASH (USD) 30,366 21,242 14,860 10,396 Hungary Ireland Israel Italy Jordan Kazakhstan Almaty Kenya Lebanon Lithuania Luxembourg Moldova Morocco Netherlands Nigeria Norway Oman Poland Portugal Romania Russia Moscow Saudi Arabia Serbia Slovakia Slovenia Spain Sweden Switzerland ANNUAL MEDIAN TOTAL CASH AND DIFFERENTIALS, 2015, CONTINUED NET PAY (SINGLE, NO CHILDREN) PARA- 18,842 13,244 9,327 6,586 21,159 14,872 10,474 7, NET PAY (MARRIED, TWO CHILDREN) PARA- 20,209 14,610 10,693 7,953 22,694 16,406 12,008 8, METHODOLOGY: Differentials are expressed as percentages. A positive differential indicates that pay in the compared country is greater than the base country, while a negative differential indicates the reverse. To compute the pay in the compared country, add 100 to the differential and divide the result by 100. Then multiply the resulting factor with the base country pay Mercer LLC. 559 International Geographic Salary Differentials Global

15 GEOGRAPHIC SALARY DIFFERENTIALS LATVIA SAMPLE GROSS PAY PARA- TOTAL CASH (EUR) 27,041 18,917 13,233 9,257 TOTAL CASH (USD) 30,366 21,242 14,860 10,396 Tunisia Turkey Ukraine Kiev United Arab Emirates United Kingdom ANNUAL MEDIAN TOTAL CASH AND DIFFERENTIALS, 2015, CONTINUED NET PAY (SINGLE, NO CHILDREN) PARA- 18,842 13,244 9,327 6,586 21,159 14,872 10,474 7, NET PAY (MARRIED, TWO CHILDREN) PARA- 20,209 14,610 10,693 7,953 22,694 16,406 12,008 8, METHODOLOGY: Differentials are expressed as percentages. A positive differential indicates that pay in the compared country is greater than the base country, while a negative differential indicates the reverse. To compute the pay in the compared country, add 100 to the differential and divide the result by 100. Then multiply the resulting factor with the base country pay Mercer LLC. 560 International Geographic Salary Differentials Global

16 METHODOLOGY READING THE REPORT SAMPLE The quality and accuracy of the International Geographic Salary Differentials report is based on Mercer s globally consistent methodology of defining pay and positions, along with a vast, country-by-country database of compensation and taxation data. The report presents pay differential data for seven employee levels: Executive Upper-middle management Lower-middle management Senior professional Junior professional Skilled para-professional General para-professional Each employee level matches a position class (PC) using Mercer s International Position Evaluation (IPE) methodology. This approach categorises jobs into a defined number of specific PCs that represent a narrow band of positions with similar responsibility levels. The report considers data for seven PCs (60, 57, 54, 51, 48, 45, and 42) for seven employee levels. MERCER S PAY DATA METHODOLOGY The report compiled pay-level data from Mercer s 2015 Total Remuneration Surveys, which gather salary data through a standardised, worldwide survey process. The analysis presents figures from an all-industry perspective and does not consider industry-specific or regional differences. The Mercer WIN regression methodology calculates market statistics (quartiles, mean, and median) for each PC in a selected market indicating how each organisation pays at that PC. The amount of survey data provided by each organisation does not influence the results, as each organisation counts once in each PC. Regression analysis is a common tool for analysing data gathered in salary surveys. When a company creates or reviews its salary structures, regression analysis defines the level of median pay relative to a pay grade. The development of a compensation structure from surveys helps employers offer pay levels within a range of what the outside competitive labour market would pay without overpaying or underpaying employees. By comparing the company s current structure to the market usually on an annual basis compensation administrators can determine the amount of overall movement necessary to bring the current salary structure up to date, if required Mercer LLC. 777 International Geographic Salary Differentials Global

17 SAMPLE ABOUT MERCER Mercer is a global consulting leader in talent, health, retirement, and investments. Mercer helps clients around the world advance the health, wealth, and performance of their most vital asset their people. Mercer s 20,500+ employees are based in more than 40 countries, and we operate in more than 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy, and human capital Mercer LLC. 792 International Geographic Salary Differentials Global