global pay summary - we

8/17/2019 Global Pay Summary - WE

1/212

GLOBAL PAY SUMMARYWESTERN EUROPE

2015


2/212

© 2015 Mercer LLC. 2 Global Pay Summary — Asia Pacific

PUBLICATIONS DIRECTOR

Samantha Polovina

CREATIVE DIRECTOR

Stefani Baldwin

PRODUCTION MANAGER

Sumit Bajaj

PROJECT MANAGER

Preetpal Singh

ANALYSTS

Deepak Gaur

Devi V

Rishi Kumar

Sunil Kaushal

Vinay Pathania

Vishal Singla

WRITERS

Aashi Choudhary

Virginia McMorrrow

DESIGNER

Kritika Garg

GRAPHIC ARTISTS

Neha Sobti

Vishal Kapoor

COPYEDITOR

Shubham Bhatnagar

Published by:

1166 Avenue of the

Americas, New York, New

York 10036, United States

Condition of Sale

Copyright © 2015. All rights reserved. No part of this publication may be reproduced, stored ina 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 ofthe material in this publication can be accepted by the authors or the publishers.

For information about your order or other Mercer products, contact your

nearest Mercer office:

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 youmay have about our data or analysis.

ASIA EUROPE

SingaporeTel: +65 6332 0188

[email protected]

PolandTel: +48 22 434 5383

[email protected]

AUSTRALIA LATIN AMERICA

Sydney

Tel: +61 2 8864 6800

[email protected]

Argentina

Tel: +54 11 4000 0954

[email protected]

CANADA UNITED STATES

Toronto

Tel: +1 416 868 2000

[email protected]

Louisville

Tel: +1 800 333 3070

[email protected]

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 www.imercer.com/global .

Take a moment and share your thoughts with us.

mailto:hrsolutions.ap%40mercer.com?subject=hrsolutions.ap%40mercer.commailto:client.services.europe%40mercer.com?subject=client.services.europe%40mercer.commailto:customerservice%40mercer.com?subject=customerservice%40mercer.commailto:client.services.la%40mercer.com?subject=client.services.la%40mercer.commailto:info.services%40mercer.com?subject=info.services%40mercer.commailto:surveys%40mercer.com?subject=surveys%40mercer.comhttp://www.imercer.com/default.aspx?page=content&contentId=142mailto:%23MercerDMI%40hub.wmmercer.com?subject=%23MercerDMI%40hub.wmmercer.commailto:%23MercerDMI%40hub.wmmercer.com?subject=%23MercerDMI%40hub.wmmercer.comhttp://www.imercer.com/default.aspx?page=content&contentId=142mailto:surveys%40mercer.com?subject=surveys%40mercer.commailto:info.services%40mercer.com?subject=info.services%40mercer.commailto:client.services.la%40mercer.com?subject=client.services.la%40mercer.commailto:customerservice%40mercer.com?subject=customerservice%40mercer.commailto:client.services.europe%40mercer.com?subject=client.services.europe%40mercer.commailto:hrsolutions.ap%40mercer.com?subject=hrsolutions.ap%40mercer.com


3/212

© 2015 Mercer LLC. 3 Global Pay Summary — Western Europe

TABLE OF CONTENTS

4

6

9

12

15

44

45

47

49

59

73

81

93

113

117

125

137

145

146

148

154

158

162

166

170

174

178

182

186

190

194

198

202

206

210211

INTRODUCTION

GLOSSARY

OVERVIEW OF BENCHMARK POSITIONS

Top management

Legal

Human resources

Finance

Administration

Information technology

Sales and marketing

Research and development

Engineering

Operations

Supply and logistics

ABOUT MERCER

METHODOLOGY

SEVEN QUESTIONS ABOUT COMPENSATION

SUMMARY OF KEY FINDINGS

COUNTRY BENCHMARK POSITIONS

Austria

Belgium

Denmark

Finland

France

Germany

Greece

Ireland

Italy

Netherlands

Norway

Portugal

Spain

Sweden

Switzerland

United Kingdom

DATA MINING & INSIGHTS


4/212


We are pleased to present the twelfth edition of Global Pay Summary (GPS). The report provides a

comparative study of annual base salary (ABS) and annual total cash compensation (ATC) for 50

benchmark positions across 76 countries and 89 locations — 17 locations in the Americas, 29 in Asia

Pacific, 27 in Eastern Europe, Middle East, and Africa, and 16 in Western Europe. Salary figures are drawn

from Mercer’s 2014 Total Remuneration Surveys (TRS) and our compensation databases.

The great recession of 2008 has left its mark on the global economic and business panorama, with global

growth rates remaining anemic and uneven. The moderate growth experienced by advanced countries

has failed to stimulate investment. As a result, the October edition of the 2014 World Economic Outlook

(WEO) predicts the global economy to grow by 3.3% in 2014 and 3.8% in 2015. According to this report,

growth prospects differ for advanced and emerging markets. While growth rates are expected to pick up

in advanced economies, albeit at a slower rate in Japan and Europe, they are forecast to grow at faster

rates in the rest of the advanced countries. The emerging markets in Asia are still set to lead the growth

rates, even as that in China moderates.

The economic uncertainties have contributed to new efficiency challenges related to costs and a talented

workforce. While scarcity of talent was a well-debated problem during the pre-crisis period, the focus in

recent years has shifted to finding and retaining the right talent and key performers. Thus, compensation

strategy has changed from a wage-war scenario to a performance-driven competitive pay structure.

Moreover, the mixed trends in economic growth have resulted in adjustments to business models and

strategies. Companies are increasingly looking at leaner and flexible workforce models — helping to keep

costs optimal, while allowing management sufficient agility to reconfigure or hire based on need. This

change requires clear understanding of salary levels in the market. At the same time, a well-structured pay

programme for employees remains the strongest factor in motivating them and attracting the right talent.To this end, GPS provides comprehensive data for reviewing the company’s current pay strategy and

budget preparation, as well as developing an optimal salary structure.

This quick reference guide supports effective pay planning for different career levels by comparing salary

components, along with market pay range, for a single job position within a country. It helps human

resources professionals:

• Benchmark and design competitive pay to operate at optimal levels.

• Attract and retain key talent through a well-designed competitive compensation package.

• Compare pay data across countries to determine cost-efficient locations for expansion and growth.

INTRODUCTION


5/212


REPORT STRUCTUREThe 2015 Global Pay Summary report provides actionable salary information to formulate salary policies

according to current practices across major world markets. Designed as a quick reference guide for human

resources professionals, it offers data on annual base salary (ABS) and annual total cash compensation (ATC)

for 50 benchmark positions across 11 job families, covering the spectrum from para-professionals to top

management.

This report has four main sections:

• The Methodology section delineates the methodology used in the report and lists key definitions,

exchange rates, and data sources.

• The Summary of key findings highlights the key trends in inter- and intra-regional pay levels, using

multiple comparisons, and analysing salary differences by region, job function, and development

level of development of a country. The insights into highest- and lowest-paying countries help

companies understand the cost-effective locations within a region. This section also provides a list of

hot jobs in a particular market.

• The Overview of benchmark positions section provides ABS and ATC data for a particular job

across different locations. This information helps human resources professionals understand and

compare pay scales for different positions and job functions, and supports informed decision-making

without having to sort through voluminous survey data or complex databases.

• The Country benchmark positions section provides a snapshot of salary information for 50

benchmark jobs within a country. It exhibits vertical comparisons across different functions and

career levels.

The job functions covered in the report are:

• Top management.

• Legal.

• Human resources.

• Finance.

• Administration.

• Information technology.

• Sales and marketing.

• Research and development.

• Engineering.

• Operations.

• Supply and logistics.

INTRODUCTION


6/212


METHODOLOGY

READING THE REPORTThe 2015 Global Pay Summary (GPS) report presents concise information on pay levels for 50 benchmark

job positions around the world, representing positions common across multinational companies. The reportprovides vertical and horizontal analysis of market pay for different job levels in different countries and

regions. For example, horizontal comparisons are possible because compensation data for single positions

can be compared across countries and regions. Vertical comparisons are possible because the positions

represent the range of jobs from top management to junior-level positions. The report also provides the

market pay range for a single job position within a country.

This definitive guide will help human resources professionals in their business expansion, talent, and

compensation strategies, as well as identify cost-effective locations. The report is based on Mercer’s global

consistent methodology of defining pay and positions, and our vast, country-by-country database of

compensation data. Pay data within each country matches our core benchmark position structure, using

Mercer’s International Position Evaluation (IPE) methodology. The IPE methodology ensures that

position levels are consistent and accurately mapped for comparison, regardless of country or industry. This

system also helps to map job roles to position classes (PCs) based on the scope of the roles, responsibilities,

and company size, thereby supporting an accurate comparison of peers in the market.

Global Pay Summary provides annual base salary (ABS) and annual total cash compensation (ATC) data in

local currency and USD, as well as information on annual guaranteed cash (AGC) for selected countries in the

case studies.

• ABS is the monthly base salary multiplied by the number of months of pay (based on company

policy).• AGC refers to ABS and the annual fixed allowances or any guaranteed cash.

• ATC refers to the total ABS in addition to any guaranteed cash and actual annual short-term

incentives.

The analysis displays pay data for low, median, and high values of ABS and ATC. Low figures represent the

33rd percentile of observations in Mercer’s pay database, high figures represent the 67th percentile, and

median figures represent the median value.


7/212


EXCEPTIONS AND NOTES• The ABS component includes base salary and allowances for Colombia (Americas), India (APAC),

and South Africa (EEMEA).

• The data presented for China (APAC), Kazakhstan, Russia, and Ukraine (EEMEA) pertains to major

cities in these markets and is denoted in tables by “Country–Market.”• In the Americas regional edition, all executive positions have role differences in North American and

Latin American countries; hence, they are treated separately. Their position descriptions appear

separately for the two sub-regions. The key findings analysis does not consider these positions.

• The head of systems engineering and systems engineer positions are replaced by technical service

manager and process engineer — experienced benchmark jobs in this edition.

• In 2015, Wuxi (China) does not include Changzhou, as it did in 2014. Therefore, the data for 2015

might vary compared to 2014.

The range of pay data may appear wide, primarily due to company size variation and the sampling of their

pay practices in the database for some positions. The data is based on Mercer’s job evaluation in local

markets, with statistics derived from individual country databases of Mercer’s 2014 All Industry TotalRemuneration Surveys (TRS). TRS reports provide extensive details on all elements of compensation and

benefits.

The salary information for some positions in a few countries might be less than in the previous year for the

following reasons:

• The sample of participating companies is different this year, resulting in a change in Mercer’s IPE

levels reported in the job titles. This change can be seen in the PC ranges of each job position.

• Increased unemployment rates, uncertain business conditions, and continued slow growth have

increased talent availability. This increased talent supply, in turn, has reduced the pressure on

employers to increase salaries to attract and retain desirable employees. New hires typically cannot

demand, and do not receive, salaries as high as they did a few years ago, causing actual data to

decrease for some positions.

• A large talent gap is an indirect reason for lower salaries in some areas. Although employers may

promote employees in some positions at a faster rate to cover the talent gap, salaries for these

promotions might be lower than previously offered.

METHODOLOGY


8/212


METHODOLOGY

Austria AT: Total Remuneration Survey (April) 159

Belgium BE: Total Remuneration Survey (April) 290

Denmark DK: Total Remuneration Survey (June) 227Finland FI: Total Remuneration Survey (June) 204

France FR: Total Remuneration Survey (April) 468

Germany DE: Total Remuneration Survey (April) 519

Greece GR: Total Remuneration Survey (April) 123

Ireland IE: Total Remuneration Survey (April) 151

Italy IT: Total Remuneration Survey (April) 351

Netherlands NL: Total Remuneration Survey (April) 303

Norway NO: Total Remuneration Survey (July) 173

Portugal PT: Total Remuneration Survey (April) 287

Spain ES: Total Remuneration Survey (April) 339

Sweden SE: Total Remuneration Survey (July) 351

Switzerland CH: Total Remuneration Survey (April) 230

United Kingdom UK: Total Remuneration Survey (April) 475

CURRENCY CONVERSION RATES IN USD AS OF 7TH NOVEMBER 2014

Note: These exchange rates are rounded to two significant digits. Data in the tables was prepared using high degrees of precision.

CURRENCY CONVERSION RATES AND DATA SOURCES

Country Source No. of participants

Austria EUR 0.79

Belgium EUR 0.79

Denmark DKK 5.87

Finland EUR 0.79

France EUR 0.79

Germany EUR 0.79

Greece EUR 0.79

Ireland EUR 0.79

Country Currency

code

USD1= Country Currency

code

USD1=

DATA SOURCES, 2014

Italy EUR 0.79

Netherlands EUR 0.79

Norway NOK 6.54

Portugal EUR 0.79

Spain EUR 0.79

Sweden SEK 7.23

Switzerland CHF 0.95

United Kingdom GBP 0.62


9/212



Q. Why use benchmark jobs?

A. There are five key reasons to use benchmark jobs in compensation planning:• Commonly found and defined, they allow pay comparisons within the organisation or to

comparable jobs outside the organisation.

• Specific and realistic job specifications relate to what, why, and how work is done on a specific job.

• As positions rarely match exactly, employers must decide whether a premium or discount is

appropriate for the particular job position based on survey data, thereby ensuring competitive pay.

• Benchmark jobs help create career ladders, supporting the company’s motivation and retention

of valuable talent.

• They provide samples of various levels in most job functions, so employers have an overall

picture of their organisation and pay levels.

Q. Why is base salary important?

A. Base salary plays a key role in compensation planning and strategy for these reasons:

• Base salary is a core component of a total rewards package.

• It is often the cornerstone of that reward package and the starting point for calculating other

components of the package.

• Employees view base salary as the most important element of “the deal” between the employee

and employer.

• The way in which salary is set and progressed can have a significant impact on whether an

employee engages positively in work.• It is critical that base pay be “right,” which means it should be internally equitable and externally

competitive. If base pay is not “right,” it may distract employees from the task in hand.

Q. What is the difference between annual base salary and annual total cash compensation?

A. The two terms are defined as follows:

• Annual base salary (ABS) is monthly salary multiplied by the number of months (per company

policy) used for computing annual compensation. Gross ABS includes salary sacrificed items but

excludes any cash allowances, superannuation, and benefits.

• Annual total cash compensation (ATC) represents ABS, plus nonvariable remuneration and short-term incentives (STIs), which include, for example, bonus, sales commission, and profit sharing,

but exclude share options.


10/212



Q. What are the key steps in the annual compensation planning process?

A. Most administrators follow this general planning process every year:

• Update job descriptions, if necessary.

• Determine market comparators (peers by industry, region, headcount size, and so on).• Collect market salary data.

• Match benchmark jobs to market salary data.

• Set measurement standards to determine status against desired position.

• Conduct measurement of:

— Internal equity (review for potential problem areas).

— External competitiveness (review for underpayment or overpayment).

— Alignment of pay and performance (consider whether the plan is workable).

— Alignment with business and strategic goals (determine whether the plan helps employees

achieve overall organisational goals).

• Formulate recommendations to adjust salary levels overall, for specific pay levels and/or job

functions, and so on.• Obtain management approval of recommendations.

• Implement the compensation plan.

• Communicate the plan to employees.

Q. What factors affect compensation levels?

A. Among the many factors that have an impact on pay in different countries, the following are key:

• Talent supply and demand.

• The competitive market.

• The company’s desired pay position in the market. • The compensation mix of base salary and incentives.

• The alignment of pay with the company’s business goals, mission, and cultural values.

• Professional development programmes.

• Mandatory minimum salaries.

• Cost of living.

• Standard of living.

Q. What factors influence a company’s compensation strategy?

A. Both internal and external factors have an impact on compensation strategy. Internal factors includethe following points:

• Business strategy may emphasise some job functions over others, such as sales positions.

• Current pay programmes determine levels and components of the pay package.

• Incumbent expectations and perceptions can affect their productivity.

• Organisational ownership, structure, and financial constraints may limit pay budgets.


11/212



External factors include the following points:

• External competitiveness compares the company’s pay policies and practices to the external

market.

• Performance expectations must be clear — using accurate job descriptions; examples of

problematic employee behaviour; timely and continuous feedback; and expectations that are

specific, measurable, time-bound, and realistic — to help employees understand what is expected

and how these factors affect their compensation.

• Industry trends influence employees’ expectations of what they should receive.

• Tax treatment, company rules and regulations, and accounting standards can impact the pay

strategy.

Q. How can metrics help in compensation planning and strategy?

A. Consider the following case study. A hypothetical company designed its business to rely heavily onselling additional services to existing customers. Although it had developed significant resources to

understand customer needs and expectations, it conducted very little research to determine whatmotivated its employees. The metrics analysis revealed that:

• The company rewarded new hires — who did not have a strong relationship with existing

customers — over incumbents, resulting in a significant loss in potential revenue gains every year.

• The number of service years was the single biggest driver of financial performance and growth.

Recommendations for action included the following:

• Shifting human capital practices to develop firm-specific expertise and build on existing customer

relationships.

• Realigning pay between new hires and high performing incumbents.

• Using broadbanding to build career milestones.

• Hiring at lower levels to grow from within.


12/212


GLOSSARY

COMPENSATION-RELATED DEFINITIONS Annual base salary (ABS): Monthly base salary multiplied by the number of months per year that salary

is paid (according to company policy).

Annual guaranteed cash (AGC): Annual base salary plus guaranteed allowances, which include meal

allowance, vehicle allowance, and so on.

Annual total cash compensation (ATC): Annual base salary plus nonvariable remuneration and short

term incentives, which include bonus (for example, bonus, sales commission, profit sharing) but exclude

share options. The figures reported reflect the actual award amounts received over last 12 months.

Guaranteed cash allowances: Cash allowances that are guaranteed to the employee regardless of their

performance. They can be either paid out in cash, as an addition to the base salary or in the form of

vouchers or coupons and may significantly vary from country to country. Employees are given cashallowances in order to cover the costs of, for example, meals or transportation.

High: The 67th percentile of observations in Mercer’s salary database.

Low: The 33rd percentile of observations in Mercer’s salary database.

Median: The 50th percentile (median) of observations in Mercer’s salary database.

Position class (PC) range: Benchmark positions are displayed by job title, covering all PCs for a given job.

PC is the Mercer level that is created using Mercer’s International Position Evaluation (IPE) system. Typical

PCs for different employee levels are:

• Executives: PCs 57–62.

• Management: PCs 52–57.

• Professional: PCs 47–52.

• Para-professional (staff): PCs 42–47.

Short-term incentives: Rewards relating to the performance against selected criteria over a period of

one year or less. These include performance-related bonuses, sales bonuses, sales commissions, profit-

sharing schemes, other bonuses, and exceptional premiums.

Total Remuneration Surveys (TRS): Mercer conducts the TRS in more than 60 countries. Each TRS

includes data for a set of core benchmark positions and, in many markets, industry-specific positions such

as consumer goods, pharmaceuticals, and high-technology. Mercer’s TRS allows access to market data for

pay and benefits, as well as the ability to generate statistics tailored to an organisation’s needs.


13/212


GLOSSARY

JOB FAMILY DEFINITIONSTop management: This job family works to achieve the company’s operational and financial goals.

Employees help to control, direct, and participate in corporate activities through a hierarchy of managers

and supervisors. Top managers undertake long-term strategic planning, determine policies, allocate

resources, and make decisions on growth and diversification to accomplish corporate goals.

Legal: This job family ensures that the company complies with the legal and regulatory requirements of

the country(s) where it operates and strives to maintain positive relations with investors and regulatory

bodies.

Human resources: This job family manages human resources. Activities include developing human

resources management strategies and policies to meet business needs; and planning, administering, and

reviewing activities concerned with recruitment, training and development, compensation and benefits,

and employee relations. In some companies, the activities of this job family may include payroll, employee

communications, and health and safety.

Finance: This job family manages financial and accounting operations. Areas of responsibility include

preparing, collecting, and interpreting financial information; preparing budgets, reports, forecasts, and

statutory returns; conducting financial analyses of proposals, investments, and fund sources; managing

taxation; managing cost accounting systems and cash flow; conducting audits; controlling treasury

matters; and ensuring compliance with regulatory standards.

Administration: This job family handles a range of diverse administrative or staff functions, which may

include finance, human resources, information technology, planning, supply, and other corporate

services. Activities also include performing administrative and related support services.

Information technology: This job family acquires, designs, implements, and operates information

technology resources, including computer hardware, operating systems, communications, software

applications, data processing, and security. Activities include developing information technologystrategies, policies, and plans; managing the acquisition, implementation, maintenance, and use of

information technology resources; and training and supporting technology users.

Sales and marketing: This job family oversees sales and marketing activities, including market research,

pricing, sales, and merchandising activities; marketing campaigns and promotions; business

development activities; customer service; and invoicing, credit, and payment administration.

Research and development: This job family’s operations include formulating research strategies;

evaluating the cost and benefits of alternative research opportunities; and undertaking research, design,

and development activities to improve the company’s products and services.

Engineering: This job family manages engineering and technical operations, and may involve various

branches of the engineering profession — for example, electronic, environmental, mechanical,

maintenance, or plant engineering. Activities include designing, constructing, testing, and operating

equipment; ensuring that standards of quality, cost, safety, reliability, timeliness, and performance are

met in production processes; and interpreting plans, drawings, and specifications.

Operations: This job family is responsible for the production activities of manufacturing companies to

optimise resource use, minimise costs, and maintain quality standards. Activities include planning,

managing, and reviewing production operations to achieve output and quality objectives; monitoring

expenditures and forecasting resource inputs; and operating, monitoring, and maintaining machines and

production equipment.


14/212


GLOSSARY

Supply and logistics: This job family manages the supply, storage, and transport and distribution of

equipment, materials, and goods used and produced. Activities include materials control and planning,

managing supplier relationships, logistics and supply chain management, purchasing, and inventory

control.

MERCER’S INTERNATIONAL POSITION EVALUATION (IPE) SYSTEMMercer surveys around the world are based on the IPE system. As part of the survey process, TRS

members receive job-matching tools designed specifically to support this survey, including a set of

benchmark evaluations for each survey role. The IPE system is a proven approach to position evaluation

used by companies around the world.

IPE relies on evaluating positions, not the employees holding those positions — because the qualifications

and performance of incumbents can differ from what positions actually require. Position evaluation is not

just a tool for salary comparisons, but is also instrumental in recruiting, career planning, designing

corporate structures, and dealing with expatriate compensation and planning.

This tool is a robust, user-friendly job evaluation process that can form the foundation of integrated

human resources systems including:

• Rewards.

• Organisation design.

• Talent development.

• Career planning.

• Performance management.

• Mobility.

IPE focuses on four business-related dimensions:

• Impact and contribution to business unit results.

• Communication.

• Innovation.

• Required knowledge.

Risk is an optional factor that may be used in high-risk industries or professions. Each factor is divided into

degrees with individual weightings. The improvements to the system reflect the changes made by many

companies to flatten their structure or transition to a network-based or team environment. The result is an

easy-to-use system that facilitates position comparisons not only within a company but also across

companies and industries.

The system allows accurate comparisons between positions, as job titles alone can be misleading. For

example, a finance manager in one company may describe a position that has more operational

responsibilities compared to a finance manager in a second company with more strategic responsibilities.

In other words, the scope and content of a finance manager’s position could be broad in some companies

and limited in others. Using the IPE method can further isolate similar positions and responsibilities.


15/212

SUMMARY OF KEY

FINDINGS


16/212



The 2015 Global Pay Summary report provides an overview of the pay levels for 50 benchmark positions

across selected countries. This section presents a number of key trends using a variety of comparisons —

for example, annual base salary (ABS) and annual total cash compensation (ATC), emerging vs. developed

economies, costliest and cost-effective countries, and others — for positions commonly found in most

organisations. Case studies illustrate salary differences by region, job family, country grouping, and so on.

Insights into salary variations within countries, cash composition, and allowances and variable payprovide an overall picture of country salary levels. Finally, with talent scarcity facing many countries, the

listing of “hot jobs” offers insights into tight labour markets around the world.

GLOBAL TRENDSVarious factors determine the salary levels in any country or region, including the interaction between the

demand and supply of labour, the level of development, quality of living, cost of living, exchange rates,

mandatory wage controls, and others. For example, advanced economies — such as the US and

Switzerland — have relatively high salaries compared to emerging markets, due to factors such as the

relative high quality of living associated with high costs prevalent in the market, as well as scarcity of

labour in these markets. As a result, employers must search for cost-advantageous locations to expandtheir business.

However, the term “emerging markets,” first used by the World Bank to distinguish third-world countries

in transition from developing to developed countries, now includes more than 40 nations. This movement

has led to filtering these countries into groups with high future potential:

• BRIC: Brazil, Russia, India, and China.

• CIVETS: Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa.

• Emerging Seven (E7): Brazil, China, India, Indonesia, Mexico, Russia, and Turkey.

• EAGLEs, or Emerging and Growth-Leading Economies: Brazil, China, Egypt, India, Indonesia,

South Korea, Mexico, Russia, Taiwan, and Turkey.

• MINT:

Mexico, Indonesia, Nigeria, and Turkey.

• MIST: Mexico, Indonesia, South Korea, and Turkey.

• Next 11 (N11): Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey,

South Korea, and Vietnam.

• TIMP: Turkey, Indonesia, Mexico, and Philippines.

Therefore, from a compensation perspective, an analysis of these countries with “high future potential”

has shown that:

• N11 countries pay the lowest ABS for human resources and accounting managers, whereas TIMP

countries exhibit a cost advantage for marketing and office administration managers’ positions.

• The CIVETS emerge as the lowest ATC-paying locations for three of the four managerial positions.• With regards to both ABS and ATC, BRIC countries are the costliest locations for employing

accounting and office administration managers among the emerging countries.

• For ABS, the EAGLEs are the costliest locations for human resources and marketing managers, as well

as the costliest in ATC for marketing managers.


17/212



METHODOLOGY: ANNUAL BASE SALARY AND ANNUAL TOTAL CASH COMPENSATION TABLE

This table compares the average annual base salary (ABS) and the annual total cash compensation

(ATC) levels of managers in different job functions — human resources, accounting, marketing, and

office administration — across different emerging country groups. In the table, green denotes the

highest-paying location and blue the most cost-effective.

Human resources

manager

Accounting

manager

Marketing

manager

Office administration

manager

Annual base salary (ABS)

CIVETS 46,797 39,716 51,036 35,948

MINT 46,831 40,173 48,532 32,916

N11 43,963 38,516 48,662 30,640

MIST 52,745 46,560 55,796 38,613

EAGLEs 53,838 50,105 57,796 42,292

TIMP 44,768 38,663 47,712 30,427

BRIC 53,834 53,035 57,457 43,894

E7 51,417 48,014 54,601 40,655

Annual total cash compensation (ATC)

CIVETS 52,497 44,854 57,929 40,392

MINT 58,696 50,662 61,304 42,599

N11 52,696 46,530 58,285 37,328

MIST 64,441 57,113 67,606 48,169

EAGLEs 63,936 58,960 68,375 50,367

TIMP 55,215 47,833 59,307 38,777

BRIC 63,055 60,688 67,341 51,417

E7 61,551 56,774 65,409 48,815

MANAGERS: ANNUAL BASE SALARY AND ANNUAL TOTAL CASH COMPENSATION USD, 2014

COMPENSATION COMPARISON E7 VS.G7 — A CASE STUDYPricewaterhouseCoopers (PwC) first coined the term “E7” in the Stern Review report, published in 2006.

This report predicted that, by 2050, the E7 markets (Brazil, China, India, Indonesia, Mexico, Russia,

and Turkey) will have larger economies than the G7 economies (the seven wealthiest, developed nations:

Canada, France, Germany, Italy, Japan, the UK, and the US). This section provides an overview of the

salary differences among the E7 and G7 markets.

The cost advantage in the tables shows the percentage salary differential of a country compared to the

top-paying country. For example, for the human resources manager, Indonesia has an ABS cost

advantage of 78% over the US, the top-paying location. In other words, for the same job in Indonesia, a

company will pay a base salary equivalent to 22% of the base salary paid for the same job in the US.

The table also provides fixed pay as a percentage of ATC in each country. The higher the proportion of

fixed pay, the lower is the variable component. A low proportion of fixed pay indicates the significance of

performance-driven pay in that location. The markets that significantly rely on performance-based pay

have more flexible pay structures, allowing companies to vary salary based on business performance.


18/212



As expected, G7 countries are generally costlier for employing key managerial talent. Also, the average

salary levels of E7 countries are two-thirds of the top-paying G7 locations. One of the main reasons for the

cost advantage of emerging markets is the large labour supply, compared to advanced countries. The

high cost of living in advanced countries is also a major determinant of their high-pay levels.

• Germany is the highest-paying country for all positions except human resources managers, where

the US ranks first.

• Human resources managers receive the highest ABS and ATC compared to managers in accounting,

marketing, and office administration.

• Brazil exhibits a relatively lower cost advantage among the emerging markets, indicating a potential

scarcity of managerial skills in the market.

• The next lowest cost-effective country after Brazil is Turkey, particularly with regards to marketing,

accounting, and office administration managers. China follows Brazil as being the second least cost-

effective country for human resources managers.

• In general, India and Indonesia offer the most cost advantages for employers in the E7 group across

the four managerial positions.

• India maintains the highest cost advantage in terms of ATC payouts compared to other countries.Managerial employees in India receive less than one-fourth of the ATC received by their peers in the

highest-paying location.

• Managers in India, the lowest-paying country, have a relatively high proportion of fixed pay in ATC.

Although India, in general, has higher fixed pay for human resources, marketing, and office

administration managers, Russia also has a high level of fixed pay for human resources and

accounting managers.

• The highest fixed pay levels in the G7 countries are Japan for the human resources manager, the UK

and the US for marketing manager, Italy for accounting manager, and the US for office administration

manager.

• In general, the lowest fixed pay levels fall in the human resources manager position across both E7

and G7 countries.

METHODOLOGY: CASE STUDY TABLES

Data in the following tables compares ABS, annual guaranteed cash (AGC), and ATC for managers in

human resources, accounting, marketing, and office administration across the 14 countries in the E7

and G7 markets. The data in this analysis is extracted from the Mercer 2014 Total Remuneration

Survey All-Industry surveys, and November 2014 exchange rates are used for the USD conversions.

The E7 and G7 salary data is the organisation-weighted average of the salaries in that group. In the

tables, green denotes the highest-paying location and blue the most cost-effective; negative values

are in red. The country listed in green, the highest paying in the group, is the benchmark to compare

the cost advantage.


19/212



Median annual compensation (USD) Cost advantage Fixed pay as a

% of total cash

compensation ABS AGC ATC ABS AGC ATC

Brazil 181,761 187,778 240,372 -17% -15% -14% 78%

China–Beijing 146,574 150,091 206,767 -33% -32% -26% 73%

India 57,926 57,926 63,865 -74% -74% -77% 91%

Indonesia 48,288 52,402 71,952 -78% -76% -74% 73%

Mexico 122,718 144,696 177,463 -44% -34% -36% 82%

Russia–Moscow 103,314 106,668 117,686 -53% -52% -58% 91%

Turkey 97,444 97,444 113,008 -56% -56% -59% 86%

Average E7 105,092 111,004 135,889 -52% -50% -51% 82%

Canada 175,030 175,030 210,627 -20% -20% -24% 83%

France 133,057 134,203 164,138 -40% -39% -41% 82%

Germany 152,065 152,224 208,391 -31% -31% -25% 73%Italy 147,440 147,440 173,527 -33% -33% -38% 85%

Japan 96,693 99,578 102,171 -56% -55% -63% 97%

United Kingdom 160,779 160,779 198,794 -27% -27% -29% 81%

United States 220,000 220,000 278,837 0% 0% 0% 79%

Average G7 171,099 171,525 214,776 -22% -22% -23% 80%

HUMAN RESOURCES MANAGER: ANNUAL COMPENSATION AND COST ADVANTAGES FOR E7 AND G7

COUNTRIES, 2014


% of total cash


Brazil 76,564 78,527 91,174 -36% -34% -32% 86%

China–Beijing 65,900 70,149 80,221 -45% -41% -40% 87%

India 29,705 29,705 31,391 -75% -75% -76% 95%

Indonesia 32,811 34,523 40,386 -72% -71% -70% 85%

Mexico 53,382 63,376 69,862 -55% -47% -48% 91%

Russia–Moscow 55,784 55,857 63,383 -53% -53% -53% 88%

Turkey 69,863 69,973 83,671 -41% -41% -37% 84%

Average E7 54,601 57,507 65,409 -54% -52% -51% 88%Canada 89,277 89,277 98,786 -25% -25% -26% 90%

France 89,245 89,830 104,727 -25% -25% -22% 86%

Germany 119,308 119,371 133,560 0% 0% 0% 89%

Italy 84,291 84,889 93,371 -29% -29% -30% 91%

Japan 86,987 88,881 102,532 -27% -26% -23% 87%

United Kingdom 93,250 93,252 101,056 -22% -22% -24% 92%

United States 96,500 96,507 105,000 -19% -19% -21% 92%

Average G7 94,390 94,698 104,983 -21% -21% -21% 90%

MARKETING MANAGER: ANNUAL COMPENSATION AND COST ADVANTAGES FOR E7 AND G7

COUNTRIES, 2014


20/212



© 2015 Mercer LLC. 20 Global Pay Summary – EEMEA


% of total cash


Brazil 76,974 79,145 89,475 -35% -33% -31% 88%

China–Beijing 52,533 53,969 64,628 -55% -54% -50% 84%

India 27,136 27,136 29,211 -77% -77% -77% 93%

Indonesia 25,995 27,678 31,864 -78% -77% -75% 87%

Mexico 46,910 56,582 62,482 -60% -52% -52% 91%

Russia–Moscow 58,797 59,322 63,425 -50% -50% -51% 94%

Turkey 63,735 63,735 72,965 -46% -46% -44% 87%

Average E7 48,014 50,553 56,774 -59% -57% -56% 89%

Canada 101,538 101,538 115,663 -14% -14% -11% 88%

France 82,369 82,955 93,929 -30% -30% -28% 88%

Germany 117,851 117,851 129,619 0% 0% 0% 91%Italy 86,084 86,860 93,791 -27% -26% -28% 93%

Japan 89,102 90,169 101,896 -24% -23% -21% 88%

United Kingdom 97,682 98,690 106,751 -17% -16% -18% 92%

United States 100,152 100,289 110,300 -15% -15% -15% 91%

Average G7 97,853 98,182 109,075 -17% -17% -16% 90%

ACCOUNTING MANAGER: ANNUAL COMPENSATION AND COST ADVANTAGES FOR E7 AND G7

COUNTRIES, 2014


% of total cash


Brazil 66,210 68,199 81,960 -40% -40% -36% 83%

China–Beijing 45,926 48,447 56,740 -59% -57% -56% 85%

India 25,146 25,146 25,929 -77% -78% -80% 97%

Indonesia 26,328 27,992 33,726 -76% -75% -74% 83%

Mexico 35,588 44,967 48,765 -68% -60% -62% 92%

Russia–Moscow 44,098 45,088 47,298 -60% -60% -63% 95%

Turkey 50,457 52,316 56,087 -55% -54% -56% 93%

Average E7 40,655 43,086 48,815 -63% -62% -62% 88%Canada 71,035 71,302 73,533 -36% -37% -43% 97%

France 75,133 76,935 85,924 -32% -32% -33% 90%

Germany 111,195 112,815 128,207 0% 0% 0% 88%

Italy 74,947 78,287 82,630 -33% -31% -36% 95%

Japan 87,603 88,898 105,043 -21% -21% -18% 85%

United Kingdom 67,527 67,527 70,449 -39% -40% -45% 96%

United States 59,661 59,661 61,062 -46% -47% -52% 98%

Average G7 71,139 71,793 76,755 -36% -36% -40% 94%

OFFICE ADMINISTRATION MANAGER: ANNUAL COMPENSATION AND COST ADVANTAGES FOR E7

AND G7 COUNTRIES, 2014


21/212



25%

54%

20%

1%

18%

71%

12%

0%

48%

41%

10%

0%

19%

81%

0% 0%0%

13%

81%

6%

0%

20%

40%

60%

80%


22/212



When looking at annual total cash compensation (ATC) as a whole:

• On a global basis across all regions, in 66% of countries, ATC falls between USD10,000 and

USD40,000. This finding is led by countries in EEMEA (85%) and the Americas (82%).

• Western Europe is an even costlier region to employ sales representatives; in 69% of countries in the

region, the ATC is between USD40,000 and USD70,000, a further 13% pay in the USD70,000 and

USD100,000 range, and 6% pay more than USD100,000. This indicates a higher emphasis on variable

pay components and allowances that make up ATC in the region.

• In Asia Pacific, while still the most cost-effective region, just 17% of countries pay an ATC of less than

USD10,000 and 69% pay between USD10,000 and USD40,000.

SALES REPRESENTATIVE: DISTRIBUTION OF COUNTRIES BASED ON ANNUAL TOTAL CASH

COMPENSATION, 2014

7%

66%

22%

3% 1%0%

82%

12%6%

0%

17%

69%

14%

0% 0%

7%

85%

11%

0% 0%0%

13%

69%

13%

6%

0%

20%

40%

60%

80%

100%

USD100,000

Global Americas APAC EEMEA Western Europe

P e r c e n t a g e o f c o u n t r i e

s

Annual total cash compensation ranges


23/212



REGIONAL TRENDS WESTERN EUROPERecognising that there is a wide variation in salary levels among geographic regions is important when

developing salary structures for a global workforce. A further understanding of the comparative cost

advantages within a region for different skills helps human resources managers support the organisation’s

business expansion strategy. This section explores cost-effective locations within Western Europe, salary

variation within a market, and salary variation across different functions at the management career level.

COSTLIEST AND MOST COSTEFFECTIVE LOCATIONS Whether a company has an existing operation in a country, expanding it, or considering a new location,

the expense of hiring a qualified workforce is a key factor in strategic decisions. The total cost of base

salary, plus variable pay, benefits, mandatory contributions, and other reward components — when

calculated for the workforce as a whole — can be staggering.

In periods of economic uncertainty, most organisations attempt to reduce their costs, wherever feasible.

Consequently, the selection of a worksite can have a major impact on whether or not they achieve that

goal. However, while a company might desire a cost-effective location for their operation, if qualifiedtalent is unavailable in that market, it may force the company to choose a higher-cost country. Knowing

the variation in pay levels across countries can offer management a choice of locations.

The following tables on the highest- and lowest-paying countries by job identify the cost-effective

locations in Western Europe for 50 benchmark positions across 16 locations. The analysis is based on

median ABS and median ATC compensation.

• Switzerland, one of the most developed country of this region, is the costliest location for employing

key skills. Of the 50 jobs in this analysis, Switzerland pays the highest for 96% of the jobs.

• The only job where Switzerland pays relatively lower ABS and ATC compensation than Germany is

the credit and collections supervisor. Note: Switzerland does not have data for the computer

operator job and is not included in the analysis for that job.• Switzerland has been and continues to remain the most expensive location in the region, indicating

the correlation between cost of living in a country and salary levels. (See Mercer 2014 Cost of Living

report for more information).

• Portugal is the cost-effective location for 80% of the jobs for ABS. However, its cost advantage

declines to 52% of jobs for ATC. This trend indicates relatively higher allowances and variable pay

payouts in Portugal for many jobs among the low paying countries.

• Greece, followed by Finland, Italy, and France, are the other cost-effective locations in the region.

• As Greece pays the lowest ABS for 12% and lowest ATC for 34% of the jobs, it pays relatively lower

allowances and variable pay than Portugal for 22% of the jobs in this analysis.

• Portugal pays the maximum ABS and ATC for head of organisation — Tier 3 after Switzerland acrossall countries in the region, indicating scarcity of skills and resources at that level. Even though

Germany seems to be the second costliest location for 2% of the jobs, the data shows that Denmark

is the costliest location after Switzerland.

• Denmark pays the highest compensation for 40% of the jobs and, specifically, most of the

professional jobs compared to Germany.

• Most countries pay the highest for these two executive level jobs — head of marketing and head of

finance and accounting — indicating a scarcity of skills for these positions. Conversely, the head of

plant and head of production are the lowest-paying executive jobs for many countries.

• Across all Western Europe, executive secretary — senior is the highest-paying position, and

customer service representative is the lowest within the para-professional category.

http://www.imercer.com/content/cost-of-living.aspxhttp://www.imercer.com/content/cost-of-living.aspxhttp://www.imercer.com/content/cost-of-living.aspxhttp://www.imercer.com/content/cost-of-living.aspx


24/212



• Netherlands is among the highest-paying countries; however, it pays the lowest for head of

organisation — Tier 3, indicating competition in the market for the top management job.

• Sweden is the cost-effective location in this Europe region for all executive jobs; however, it pays

more to para-professionals compared to other countries in the region.

• Systems development managers in Portugal receive only 19% of ABS received by their peers in

Switzerland. The head of organisation, followed by head of finance and accounting and head of salesand marketing, has a relatively low ABS cost advantage compared to other executive levels.

• Sales representatives in Greece receive only 22% of ATC received by their peers in Switzerland.


25/212



COST-EFFECTIVE

COSTLIEST

Italy

1 2

3

Annual Base Salary – 12%Greece

Annual Base Salary – 2%


Finland

Portugal

WESTERN EUROPE TOP COUNTRIES, ANNUAL BASE SALARY% OF BENCHMARK JOBS, 2014

1 2


Germany


Switzerland

France

METHODOLOGY: TOP COSTLIEST AND COST-EFFECTIVE COUNTRIES

In the top costliest and cost-effective countries infographic below, the percentage represent the

percentage of benchmark jobs that fall in to the applicable category of being either costly or

cost-effective.

For example, 96% of the benchmark jobs in Switzerland were the costliest.

Note: Finland, Italy, and France fall in the 3rd position due to same value.


26/212



COST-EFFECTIVE

Annual Total Cash Compensation – 4%

Italy

1 2

3 4


Greece



Finland

Portugal

WESTERN EUROPE TOP COUNTRIES, ANNUAL TOTAL CASHCOMPENSATION % OF BENCHMARK JOBS, 2014

COSTLIEST

1 2


Germany


Switzerland


France5

Netherlands

Note: Germany and Netherlands fall in the 2nd position due to same value.


27/212



Benchmark jobs Highest Lowest

% Cost

Advantage Highest Lowest

% Cost

Advantage

Top management

Head of organisation – Tier 3 Switzerland Finland 54% Switzerland Finland 45%

Legal

Legal counsel – Experienced Switzerland Portugal 23% Switzerland Portugal 30%

Human resources

Head of human resources – Tier 3 Switzerland Portugal 43% Switzerland Finland 48%

Human resources manager Switzerland Portugal 30% Switzerland Portugal 37%

Compensation and benefits manager Switzerland Portugal 23% Switzerland Portugal 24%

Labour safety engineer – Experienced Switzerland Portugal 25% Switzerland Greece 28%

Human resources administration clerk –

ExperiencedSwitzerland Portugal 22% Switzerland Portugal 26%

Finance

Head of finance and accounting – Tier 3 Switzerland Portugal 53% Switzerland Portugal 52%

Credit and collections supervisor Germany Portugal 29% Germany Greece 34%

Credit and collections clerk – Experienced Switzerland Greece 25% Switzerland Greece 25%

Accounting manager Switzerland Portugal 34% Switzerland Portugal 40%

Accountant – Experienced Switzerland Portugal 28% Switzerland Greece 34%

Accounting clerk – Experienced Switzerland Portugal 24% Switzerland Portugal 28%

Audit manager Switzerland Portugal 25% Switzerland Greece 32%

Administration

Executive secretary – Senior Switzerland Portugal 24% Switzerland Greece 31%

Secretary – Experienced Switzerland Portugal 25% Switzerland Greece 29%

Office administration manager Switzerland Portugal 37% Switzerland Spain 39%

Security guard – Experienced Switzerland France 29% Switzerland France 36%


Head of information technology – Tier 3 Switzerland Portugal 35% Switzerland Finland 39%

Systems development manager Switzerland Portugal 19% Switzerland Portugal 36%

Systems analyst – Experienced Switzerland Portugal 31% Switzerland Greece 32%Systems programmer – Experienced Switzerland Portugal 25% Switzerland Portugal 28%

Web applications developer – Experienced Switzerland Italy 43% Switzerland Italy 44%

Computer operator – Experienced Germany Portugal 42% Netherlands Portugal 49%

Sales and marketing

Head of sales and marketing – Tier 3 Switzerland Portugal 52% Switzerland Portugal 57%

Head of marketing – Tier 3 Switzerland Portugal 31% Switzerland Portugal 35%

Marketing manager Switzerland Portugal 36% Switzerland Portugal 46%

Market research analyst – Experienced Switzerland Greece 22% Switzerland Greece 21%

Product/brand marketing professional –

SeniorSwitzerland Portugal 35% Switzerland Greece 40%

Sales manager Switzerland Portugal 46% Switzerland Portugal 49%

Sales manager – Regional Switzerland Portugal 25% Switzerland Greece 33%

Sales representative – Experienced Switzerland Greece 23% Switzerland Greece 22%

WESTERN EUROPE HIGHEST AND LOWEST ANNUAL BASE SALARY AND ANNUAL TOTAL CASH

COMPENSATIONPAYING COUNTRIES, BY JOB, 2014

Annual Base Salary Annual Total Cash Compensation

Note: The figures under the annual total cash compensation section reflect the actual amounts of the awards received over last 12 months.

METHODOLOGY: PERCENTAGE COST ADVANTAGE IN THE TABLE BELOW

The percentage cost advantage indicates the ABS and ATC paid in the lowest-paying country as a

percentage of what is paid in the highest-paying country. The median ABS of Legal counsel in

Portugal is 23% of what Legal counsel makes in Switzerland. The larger the percentage, the smaller

the gap between the high and low countries. Therefore, the smaller the percentage, the more cost

advantageous the lowest ABS country.


28/212



Benchmark jobs Highest Lowest % Cost

Advantage Highest Lowest % Cost

Advantage

Customer service manager Switzerland Portugal 38% Switzerland Greece 44%

Customer service representative –

ExperiencedSwitzerland Greece 31% Switzerland Greece 31%


Research and development manager Switzerland Portugal 46% Switzerland Portugal 43%

Research and development engineer –

ExperiencedSwitzerland Portugal 37% Switzerland Greece 38%

Engineering

Environmental health and safety manager Switzerland Portugal 34% Switzerland Portugal 34%

Technical service manager Switzerland Portugal 45% Switzerland Portugal 50%

Technical service technician – Experienced Switzerland Portugal 27% Switzerland Portugal 28%

Process engineer – Experienced Switzerland Portugal 30% Switzerland Portugal 31%Operations

Head of plant Switzerland Greece 47% Switzerland Portugal 50%

Head of production Switzerland Portugal 42% Switzerland Portugal 36%

Production supervisor Switzerland Portugal 36% Switzerland Greece 36%

Production worker – Experienced Switzerland Portugal 22% Switzerland Portugal 24%

Head of quality – Tier 3 Switzerland Portugal 35% Switzerland Portugal 38%

Repair and maintenance engineering

managerSwitzerland Portugal 36% Switzerland Portugal 47%


Head of supply chain – Tier 3 Switzerland Portugal 36% Switzerland Portugal 36%

Head of purchasing Switzerland Greece 31% Switzerland Greece 31%

Traffic and distribution coordinator Entry Switzerland Spain 41% Switzerland Italy 41%

Warehouse – Team leader Switzerland Portugal 25% Switzerland Portugal 29%

Annual Base Salary Annual Total Cash Compensation

WESTERN EUROPE HIGHEST AND LOWEST ANNUAL BASE SALARY AND ANNUAL TOTAL CASH

COMPENSATIONPAYING COUNTRIES, BY JOB, 2014, CONTINUED

Note: The figures under the annual total cash compensation section reflect the actual amounts of the awards received over last 12 months.

SALARY VARIATIONSUnderstanding salary variations within a market helps companies determine appropriate salary levels that

are competitive, as well as cost-effective. Wide salary variations within a country may be due to

differences in skill levels and organisational perception of a job’s importance. Sometimes, the differences

in companies’ salary structures, as well as the nature of their operation, add to this variation. On the other

hand, the narrowest pay variation implies a greater demand for that particular skill in the market;

consequently, the majority of companies try to peg their salaries at a competitive scale.

For most of the cost-effective locations in the region, there is a high variation in ABS compared to ATC

compensation. This high variation could indicate that organisations in these countries pay high ABS with

fewer allowances and variable pay when designing a salary package commensurate with employees’

skillsets.


29/212



On average, Portugal and Greece have relatively wide ABS variations in the market, indicating wide pay

positioning in these markets.

• The head of marketing in Portugal exhibits the widest ABS salary variation among the selected jobs.

In this country, a company positioning its pay at the 33rd percentile pays only 7% of ABS paid by their

competitor with pay positioning at the 67 th percentile.

• Finland exhibits contrasting trends in the same job family. While it shows the narrowest ABS variation

for the head of human resources and human resources manager, it also has the widest variation for the

compensation and benefits manager. Among the 50 benchmark jobs, the security guard --

experienced has the least ABS and ATC variation. Conversely, the head of marketing (93%) has the

highest ABS variation, and systems analyst — experienced has the widest ATC variation.

• Although Denmark , on average, has the lowest variation across a majority of jobs, for head of

purchasing and head of information technology, it has the widest variation.

• On average, Norway has the lowest variation across all jobs for both ABS and ATC.


30/212



WESTERN EUROPE TOP COUNTRIES WITH MAJORITY WIDEST ANDNARROWEST ANNUAL BASE SALARY VARIATIONS% OF BENCHMARK JOBS, 2014

1 2

3


Denmark


Annual Base Salary –12%

Ireland

Norway


Austria

1 2

3 4


Portugal



SwitzerlandGreece

NARROWEST

WIDEST


Spain

5

Netherlands

4

METHODOLOGY: SALARY VARIATION INFOGRAPHIC

In the top countries infographic below, the percentages represent the percentage of the benchmark

jobs that fall in to the applicable category.

For example, 34% of the benchmark jobs in Portugal had the highest ABS variation.


Switzerland

Note: Denmark and Norway fall in the 1st position due to same value.


31/212



WESTERN EUROPE TOP COUNTRIES WITH MAJORITY WIDEST ANDNARROWEST TOTAL CASH COMPENSATION VARIATIONS% OF BENCHMARK JOBS, 2014

WIDEST

1 2

3

Annual Total Cash Compensation –14%

Denmark



Ireland

Norway

Austria

1 2

3


Portugal



Greece

NARROWEST

Spain

Netherlands

Switzerland

Switzerland

Note: Ireland, Netherlands, and Switzerland fall in the 3rd position due to same value.

Notes: Portugal and Switzerland fall in the 2nd position due to same value.

Spain and Austria fall in the 3rd position due to same value.


32/212



WESTERN EUROPE ANNUAL BASE SALARY VARIATIONS %, BY JOB, 2014

Benchmark jobs % Variation Country % Variation Country

Top management

Head of organisation – Tier 3 70% Portugal 15% Greece

Legal

Legal counsel – Experienced 42% Denmark 13% Austria

Human resources

Head of human resources – Tier 3 46% Greece 17% Finland

Human resources manager 45% Portugal 16% FinlandCompensation and benefits manager 43% Finland 14% Germany

Labour safety engineer – Experienced 43% Greece 12% Belgium


Experienced61% Spain 7% Sweden

Finance

Head of finance and accounting – Tier 3 47% Switzerland 18% Ireland

Credit and collections supervisor 48% Portugal 7% Norway

Credit and collections clerk – Experienced 31% Ireland 9% Netherlands

Accounting manager 42% Portugal 3% Germany

Accountant – Experienced 36% Portugal 13% Italy

Accounting clerk – Experienced 29% Greece 8% Austria

Audit manager 71% Belgium 11% Germany

Administration

Executive secretary – Senior 48% Portugal 11% Netherlands

Secretary – Experienced 24% Austria 8% Norway

Office administration manager 48% Austria 5% Ireland

Security guard – Experienced 21% France 10% Spain


Head of information technology – Tier 3 68% Denmark 11% Austria

Systems development manager 70% Portugal 12% Netherlands

Systems analyst – Experienced 65% Belgium 13% Finland

Systems programmer – Experienced 38% Spain 7% United Kingdom

Web applications developer – Experienced 37% Sweden 14% Netherlands

Computer operator – Experienced 33% United Kingdom 16% France

Sales and marketing

Head of sales and marketing – Tier 3 51% Portugal 12% Austria

Head of marketing – Tier 3 93% Portugal 10% Austria

Marketing manager 38% Portugal 12% Norway

Market research analyst – Experienced 41% Spain 10% Denmark


Senior33% Greece 17% Denmark

Sales manager 32% Portugal 14% Germany

Sales manager – Regional 43% Portugal 17% Austria

Sales representative – Experienced 33% Finland 16% Sweden

Customer service manager 51% Portugal 7% Germany


Experienced36% Switzerland 10% Denmark


Research and development manager 58% Greece 9% Germany


Experienced28% Netherlands 10% Sweden

Widest Narrowest

METHODOLOGY: PERCENTAGE VARIATION TABLE

It is defined as the difference between the 67th and 33rd percentile of the market.

The variance between the low and high ABS for head of marketing in Portugal is 93%, therefore,indicating a very large difference in the market. In the Austria market, the variance is just 10%, show-

ing a very small variance in salaries in the market.


33/212




Engineering

Environmental health and safety manager 46% Portugal 17% GermanyTechnical service manager 44% Spain 15% Denmark

Technical service technician – Experienced 30% Portugal 4% Denmark

Process engineer – Experienced 22% Belgium 12% Sweden

Operations

Head of plant 37% Italy 15% Norway

Head of production 59% Greece 14% Ireland

Production supervisor 70% Portugal 12% Norway

Production worker – Experienced 31% Portugal 10% Switzerland

Head of quality – Tier 3 43% Spain 10% Germany


manager 48% Austria 13% United Kingdom


Head of supply chain – Tier 3 37% Spain 3% NorwayHead of purchasing 54% Denmark 20% Germany

Traffic and distribution coordinator – Entry 23% United Kingdom 11% France

Warehouse – Team leader 33% Spain 13% Denmark

Widest Narrowest

WESTERN EUROPE ANNUAL BASE SALARY VARIATIONS %, BY JOB, 2014, CONTINUED

WESTERN EUROPE ANNUAL TOTAL CASH COMPENSATION VARIATIONS %, BY JOB, 2014


Top management

Head of organisation – Tier 3 68% Austria 26% Greece

Legal

Legal counsel – Experienced 45% Ireland 14% Italy

Human resources

Head of human resources – Tier 3 45% Switzerland 18% Norway

Human resources manager 43% Austria 14% Norway

Compensation and benefits manager 61% Finland 19% Denmark

Labour safety engineer – Experienced 56% Greece 10% Switzerland


Experienced 64% Spain 8% Sweden

Finance

Head of finance and accounting – Tier 3 67% Switzerland 23% Italy

Credit and collections supervisor 37% Sweden 10% Norway

Credit and collections clerk – Experienced 29% Switzerland 11% Netherlands

Accounting manager 32% Switzerland 13% Greece

Accountant – Experienced 33% United Kingdom 13% Norway

Accounting clerk – Experienced 30% Greece 9% Austria

Audit manager 55% Belgium 14% Ireland

Administration

Executive secretary – Senior 27% Greece 13% Netherlands

Secretary – Experienced 24% Portugal 9% Norway

Office administration manager 57% Austria 20% Greece

Security guard – Experienced 23% United Kingdom 11% France

Widest Narrowest

Note: The report used 7th November 2014 exchange rates to convert the local compensation data into USD.


34/212



Widest Narrowest


Information technologyHead of information technology – Tier 3 80% Denmark 12% Ireland

Systems development manager 47% Austria 11% Belgium

Systems analyst – Experienced 73% Belgium 13% Finland

Systems programmer – Experienced 35% Spain 11% United Kingdom

Web applications developer – Experienced 35% Sweden 14% Netherlands

Computer operator – Experienced 42% France 21% Portugal

Sales and marketing

Head of sales and marketing – Tier 3 46% Norway 8% Ireland

Head of marketing – Tier 3 54% Greece 20% Austria

Marketing manager 38% Netherlands 18% Norway

Market research analyst – Experienced 48% Spain 15% Denmark


Senior

36% Greece 18% Denmark

Sales manager 36% Spain 19% Norway

Sales manager – Regional 38% Spain 17% Portugal

Sales representative – Experienced 37% United Kingdom 18% Norway

Customer service manager 38% Greece 19% Germany


Experienced 40% Switzerland 13% Denmark


Research and development manager 70% Greece 17% Germany


Experienced 28% France 11% Sweden

Engineering

Environmental health and safety manager 67% Portugal 20% Netherlands

Technical service manager 58% Portugal 17% DenmarkTechnical service technician – Experienced 27% Portugal 5% Denmark

Process engineer – Experienced 26% Portugal 11% Sweden

Operations

Head of plant 45% Portugal 13% Norway

Head of production 66% Denmark 15% Switzerland

Production supervisor 36% Netherlands 11% Switzerland

Production worker – Experienced 26% Ireland 12% Switzerland

Head of quality – Tier 3 57% United Kingdom 6% Norway


manager 41% Austria 16% United Kingdom


Head of supply chain – Tier 3 39% Belgium 12% Norway

Head of purchasing 68% Denmark 23% Ireland

Traffic and distribution coordinator – Entry 25% Switzerland 18% Germany

Warehouse – Team leader 34% France 14% Denmark

WESTERN EUROPE ANNUAL TOTAL CASH COMPENSATION VARIATIONS %, BY JOB, 2014,

CONTINUED

Note: The report has used 7 th November, 2014 exchange rates to convert the local compensation data into USD.


35/212



ANNUAL TOTAL CASH COMPENSATION COMPOSITION The composition of annual total cash compensation (ATC) provides insights into the significance of

different pay components that attract and retain qualified employees. Compensation that has a relatively

higher variable pay package — emphasising pay elements that link to individual, group, or company

performance — is more useful in uncertain economic and business conditions. It serves to motivate

employees to meet and/or exceed their goals, which, in turn, supports the company’s strategicobjectives.

Organisational pay plans can have differences in the compensation mix, depending on the impact of the

position on company results. So, the higher the position in the company hierarchy, the larger the share of

pay-for-performance should be in the total remuneration package. Within this share, eligibility for

incentives should always correspond to the extent of control the position has on the results. For example,

a corporate performance bonus typically does not go to employees who have no identifiable impact on

corporate results.

Countries that have higher allowances and variable pay in their salary structures generally reflect larger

variances between their ABS and ATC compensation levels. So, for example, if there are mandatedallowances in certain countries, then the allowance figures may be larger.

The following table provides insight into the proportion of ABS in ATC compensation.

• Norway had the highest percentage of ABS in ATC for around 26% of the job positions in this analysis,

indicating relatively low prevalence of allowance and variable pay.

• Finland and Austria pay the highest percentage of ABS in ATC for 20% of the jobs.

• Portugal, one of the most cost-effective locations in the region, has the lowest percentage of ABS in

ATC.

• For 36% of the jobs, Austria, Finland, Ireland, Italy, Norway, and the United Kingdom pay 100%

of ABS as a percentage of ATC compensation.• Switzerland, the costliest location paying the highest for head of organisation — Tier 3, has the

lowest percentage of ABS in ATC, indicating relatively higher allowances and variable pay.


36/212



WESTERN EUROPE ANNUAL BASE SALARY AS A PERCENTAGE OF ANNUAL TOTAL CASH

COMPENSATION, BY JOB, 2014

Benchmark jobs ABS as % of ATC Country ABS as % of ATC Country

Top management

Head of organisation – Tier 3 88% Finland 74% SwitzerlandLegal

Legal counsel – Experienced 100% Ireland 72% Portugal

Human resources

Head of human resources – Tier 3 91% Austria 75% Portugal

Human resources manager 96% Norway 71% Portugal

Compensation and benefits manager 100% Norway 78% Germany

Labour safety engineer – Experienced 100%Greece, Denmark,

Norway83% Portugal


Experienced100% Greece 83% Portugal

Finance

Head of finance and accounting – Tier 3 93% Denmark 79% Germany

Credit and collections supervisor 96% United Kingdom 73% Portugal

Credit and collections clerk – Experienced 100% Austria 75% Portugal

Accounting manager 95% Sweden 77% Portugal

Accountant – Experienced 99% Germany 78% Portugal

Accounting clerk – Experienced 100% Finland 83% Portugal

Audit manager 94% Finland 58% Portugal

Administration

Executive secretary – Senior 100% Norway 64% Portugal

Secretary – Experienced 100% Austria 78% Portugal

Office administration manager 100% Finland 69% Portugal

Security guard – Experienced 100% Italy 77% France


Head of information technology – Tier 3 98% Norway 70% Portugal

Systems development manager 97% Austria 46% Portugal

Systems analyst – Experienced 100% Spain 67% Portugal

Systems programmer – Experienced 100% Germany 84% Portugal

Web applications developer – Experienced 100% Finland 93% Denmark

Computer operator – Experienced 98% Spain 79% Netherlands

Sales and marketing

Head of sales and marketing – Tier 3 92% Austria 76% Portugal

Head of marketing – Tier 3 99% Ireland 71% Portugal

Marketing manager 98% Norway 72% Portugal

Market research analyst – Experienced 99% Germany 76% Portugal


Senior98% Norway 76% Portugal

Sales manager 95% Finland 80% Portugal

Sales manager – Regional 96% Finland 58% Portugal

Sales representative – Experienced 96% Norway 64% Portugal

Customer service manager 98% Finland 76% Portugal

Highest Lowest

METHODOLOGY: ABS AS A PERCENTAGE OF ATC TABLES

In the annual base salary as a percentage of annual total cash table, the country with higher base pay

would have, relatively lower share of allowances and variable pay compared to other countries.

Legal counsel in Ireland’s ABS is 100% of their annual total cash compensation (ATC). That is, there isvery little, if any variable component to their total cash compensation. In Portugal, the annual base

salary (ABS) of systems development manager is just 46% of their annual total cash compensation

(ATC), indicating a higher prevalence of allowances and variable pay components.


37/212



WESTERN EUROPE ANNUAL BASE SALARY AS A PERCENTAGE OF ANNUAL TOTAL CASH

COMPENSATION, BY JOB, 2014 , CONTINUED

Benchmark jobs ABS as % of ATC Country ABS as % of ATC Country

Customer service representative –Experienced

99% United Kingdom 84% Portugal


Research and development manager 98% Finland 83% Greece


Experienced100% Norway 90% Portugal

Engineering

Environmental health and safety manager 100% Austria 86% France

Technical service manager 99% Austria 88% Sweden

Technical service technician – Experienced 100% Austria, Ireland 86% France

Process engineer – Experienced 99% United Kingdom 92% Portugal

Operations

Head of plant 96% Norway 82% France

Head of production 94% Portugal 80% FranceProduction supervisor 98% Austria 80% Portugal

Production worker – Experienced 100%Norway, United

Kingdom83% Netherlands

Head of quality – Tier 3 99% Norway 76% Germany


manager99% Finland 74% Portugal


Head of supply chain – Tier 3 94% Norway 75% Germany

Head of purchasing 98% Ireland 73% Germany

Traffic and distribution coordinator – Entry 99% Italy 80% France

Warehouse – Team leader 100% Austria 85% Portugal

ALLOWANCES AND VARIABLE PAY A CASE STUDY Annual total cash compensation represents ABS plus nonvariable remuneration and short-term incentives

(STIs). These incentives generally include bonuses (for example, bonus, sales commission, profit-sharing)

but exclude share options. Within the cash component are allowances, or salary supplements paid to

employees to cover job requirements, with reimbursement usually based on actual costs. Typical

allowances, depending on country or company culture, might include allowances for maternity, festival,

transition, meal, car, childcare, family, vacation, sickness, housing, and others.

In essence, variable pay recognises and rewards employees based on factors such as productivity,

profitability, teamwork, safety, or quality — and parameters such as individual, group, or corporate

performance rather than time on the job or the job’s value. A higher proportion of variable compensation

generally goes to employees whose work has gone beyond the job description to contribute to company

success.

By designing a system that ensures that two employees with different efficiencies receive different

remuneration, the company rewards productivity and hard work and nudges underperformers to work

harder. The company can award variable pay through a share of profits, bonuses, deferred compensation,

cash, company stock, and services (such as a company-paid trip). Different types of variable pay systems

are individual incentive plans, achievement awards, lump-sum cash handouts, and sharing company

profits.

Highest Lowest


38/212



Design of an effective variable programme should consider these points:

• Measuring employee performance collectively, rather than individually, might reduce overall

enthusiasm.

• There should be a direct and visible correlation between performance and variable pay. If there is a

lack of transparency, or nonperformers are rewarded, employees can lose faith in the system’s

integrity.

• The goals that lead to employee rewards should align with company long-term objectives and

strategy.

For more information on components of variable pay, see Mercer’s Short-Term Incentives

around the World, Total Employment Costs around the World, and Worldwide Benefit &

Employment Guidelines.

The following case study for the human resources manager position illustrates variations in allowances

and variable pay information across countries.

• Portugal, a cost-effective location, provides the highest allowances (15%) to employees.• The trend among cost-effective locations is to pay a higher variable component; the highest-paying

countries pay lower allowances in the region.

• Human resources managers in Norway receive 96% of ATC in the form of ABS, the highest in the

region.

• Switzerland pays the highest variable pay in absolute values, followed by Germany, France, Italy,

and Portugal.

• Austria and Ireland do not provide allowances; consequently, ABS is the same as annual guaranteed

cash.

http://www.imercer.com/stiworldhttp://www.imercer.com/stiworldhttp://www.imercer.com/employmentcostshttp://www.imercer.com/wbeghttp://www.imercer.com/wbeghttp://www.imercer.com/wbeghttp://www.imercer.com/wbeghttp://www.imercer.com/employmentcostshttp://www.imercer.com/stiworldhttp://www.imercer.com/stiworld


39/212



ALLOWANCE VARIABLE PAY

Austria 0 7,528

Belgium 2,384 8,806

Denmark 1,260

global pay summary - we

Documents