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Survey Report | Beyond Data

Understanding regional pay differences in Europe, Middle East and Africa

Our latest geographic salary differential results are now available

Compensation Strategy & Design
Beyond Data

September 7, 2018

Our latest results tell us that one size does not fit all when it comes to geographic pay differences.

Workforces are rarely idle, particularly during periods of change. The drivers can be numerous: shifts in the location of prolonged economic growth outside of traditional labour centres, the ease of starting new operations or moving existing ones and the ability and willingness of workers to uproot themselves in the search for opportunities all contribute. In addition, such drivers interact with a multitude of social and cultural factors, such as the ability and willingness of workers to uproot themselves in the search for opportunities.

But the extent to which one might expect pay to be impacted by location is subject to a whole host of different factors which – broadly-speaking – could fuel or supress regional variations which could indirectly be reflected in relative wage levels across a given country. One example is urbanization. How compact a labor force is (so to speak), relative cost differences between urban and rural environments, the availability of large urban talent pools and the overall dominance of a country’s business center (often its largest city) can all influence relative pay differences within a national market.

The graph below showcases this diversity of markets, showing that local considerations need to be made in these countries.

Graph showing urbanisation in Europe, Middle East and Africa

Source: United Nations data

When it comes to the differentials, this means it’s important to review the data. For example, in this year’s Global Geographic Salary Differences report, the data for professionals shows that London enjoys a 14% premium over average national wage levels (which include the capital), while Moscow 17% above the average for Russia. Both countries have a relatively high level of urbanization and a wide spread of large urban centers.  On the other hand, Warsaw the differential is 9% with the data from the UN showing that it has almost the lowest urban population. This shows how meaningful understanding the differential factors are, our latest data is now available and can help you navigate the many factors affecting pay and locations around the world.

Overall though the spread of the data shows that urbanization manifest very differently across EMEA (even among neighboring markets) signalling that once again, a one size fits all approach to looking at geographic pay differences is not necessarily appropriate for determining the ease of navigation in each location. Therefore, a multifaceted, data-driven approach is required in order to understand different markets and determine the best course of action.

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