Employees looking for the (Br)exit
Since the Brexit vote, we 've all heard the predictions that companies will relocate employees to Europe. Frankfurt, Luxembourg and Paris are already making overtures to the banks for example. Potentially increased movement of talent means that, as a reward professional, you need to understand pay levels, pay mix and corporate governance across Europe to enable you to contribute to the debate. The common assumption is that European pay levels are relatively homogenous. In fact, there are material differentials in pay levels and mix, reflecting the different political, social and economic histories of EU members. We highlight some of those differences in this issue, focusing on an analysis we run annually …show more content…
Less than a tenth of total pay is in the form of long-term incentives, demonstrating less focus on long-term performance pay alignment. More broadly, two of the countries with the highest TDC (Switzerland, UK) also have some of the greatest levels of variable pay (note of course that we are looking here only at the largest listed companies in each market). In the UK in particular, this reflects strong external pressure to demonstrate strong alignment between pay and performance.
Salary freezes are more common in some …show more content…
This is partly due to external pressure (from investors and the government) to keep pay inflation in line with that for broader employees. ISS and IVIS for example, routinely flag base salary increases exceeding 5%. A similar situation appears in the Netherlands with few freezes but only moderate increases. A much larger percentage of companies in other EU countries froze pay – but those that increased it, did so more aggressively in say France or Germany (6% and 14% respectively). But looking behind the scenes reveals cultural drivers - in Germany base salaries are typically increased only every three years for example, leading to much bigger increases when they occur.
Willis Towers Watson 's view
The prospect of Brexit is causing significant uncertainty and will continue to do so. Whether there will be material movement of talent out of the UK remains to be seen. But it pays to be prepared, and employers must be well informed to be able to manage the remuneration implications of any moves. International differences in pay are nuanced, with many contributing factors – but Europe is not a single pay market at senior executive level and the packages you need to offer to meet local norms will necessarily vary by country. This is true both of differences in pay level and pay
Since the Brexit vote, we 've all heard the predictions that companies will relocate employees to Europe. Frankfurt, Luxembourg and Paris are already making overtures to the banks for example. Potentially increased movement of talent means that, as a reward professional, you need to understand pay levels, pay mix and corporate governance across Europe to enable you to contribute to the debate. The common assumption is that European pay levels are relatively homogenous. In fact, there are material differentials in pay levels and mix, reflecting the different political, social and economic histories of EU members. We highlight some of those differences in this issue, focusing on an analysis we run annually …show more content…
Less than a tenth of total pay is in the form of long-term incentives, demonstrating less focus on long-term performance pay alignment. More broadly, two of the countries with the highest TDC (Switzerland, UK) also have some of the greatest levels of variable pay (note of course that we are looking here only at the largest listed companies in each market). In the UK in particular, this reflects strong external pressure to demonstrate strong alignment between pay and performance.
Salary freezes are more common in some …show more content…
This is partly due to external pressure (from investors and the government) to keep pay inflation in line with that for broader employees. ISS and IVIS for example, routinely flag base salary increases exceeding 5%. A similar situation appears in the Netherlands with few freezes but only moderate increases. A much larger percentage of companies in other EU countries froze pay – but those that increased it, did so more aggressively in say France or Germany (6% and 14% respectively). But looking behind the scenes reveals cultural drivers - in Germany base salaries are typically increased only every three years for example, leading to much bigger increases when they occur.
Willis Towers Watson 's view
The prospect of Brexit is causing significant uncertainty and will continue to do so. Whether there will be material movement of talent out of the UK remains to be seen. But it pays to be prepared, and employers must be well informed to be able to manage the remuneration implications of any moves. International differences in pay are nuanced, with many contributing factors – but Europe is not a single pay market at senior executive level and the packages you need to offer to meet local norms will necessarily vary by country. This is true both of differences in pay level and pay