KF Pay Differential Infographic v8 - Korn Ferry

The Great Divide: The growing wage gap between top and bottom pay.

Over the last decade, the average percentage of pay gap between entry and senior level jobs has increased across all regions:

+12.5%

LATIN AMERICA

+1.6%

EUROPE

+15.3%

ASIA

NORTH AMERICA

+9.0%

AFRICA

+48.5%

MIDDLE EAST

+57.8%

PACIFIC

+6.5%

Most countries experienced a widening pay gap between entry and senior level jobs.

MIDDLE EAS

IA

New Zealand 4.7% Australia 8.3%

United StateCsa1n2a.2d%a 4.5% SaudUi AAErab4i4a.653%.3%

ANMOERRTIHCA

PACIFIC

AFRICA

60.0% Egypt

AS T

India

China 66.0%

27.9% South Africa

2.22.%6H%oCnhginKaong, 12.7% Japan Indonesia

Bahrain 117.8%

OmanQ5a5t.a9r%55.8% Kuwait 39.0%

Venezuela Peru 19.8%

-18.1%

Mexico 15.7%

Guatemala 9.9%

Domincan

Republic 26.1% Costa Rica 19.2%

Colombia 32.1%ChileB1r0az.4il%7A.6r%gentina

-2.0%

0%

9.7 %

4.3% Ko1r4e1.a279%.1.3%M%SaTilanhygasaiiaplaonrde

-4.1%

Austria 2.3% Belgium

3.9% Czech Republic

0.8% Denmark

-5.8%

2.0% Finland France

-2.6% -3.1%

Italy

5H.3u%ng0ar.1y50%.9%GeGrmreaencey Ireland

-13.4%

-18.8%

LATIN AMERICA

-3.7%

Russian Federation -3.0%

9.3%

SweTSduerwikntez2y.er76.la5%n%d Spain 1.4%

Slovakia 0.4%

Kingdom

-1-71.61%.8% -5.8L%atvLiiathLuuaxneima6b.77o.%9u%rNgeNtohrewrlaaynds

United 79.3%

Poland 10.4% Portugal

Romania

Ukraine

Percentage of salary differentials: 75%

EUROPE

INGDOM

Since 2008 the gap between top and bottom pay has increased in the following G7 countries...

STATES

ADA

ANY

AN

UNITED K UNITED CAN GERM JAP

+9.3% +12.2% +4.5% +0.5% +9.7%

At lower job levels, pay is static because of

developments such as off-shoring and automation, which leads to a surplus of available workers...

Meanwhile, at higher job levels pay is rising due to developments such as a shortage of STEM and soft skills.

On the other hand, the pay gap between top and bottom job levels is shrinking in countries like France and Italy...

-5.8% -3.1%

This is due to:

Higher tax rates for big earners

Fewer pay increases at top-levels due to tax rates

Government and union intervention for pay at lower levels

The challenges organizations face...

The common perception is that a growing wage gap is bad, and should be actively mitigated by organizations.

Companies are faced with the need for transparency, that is not just internally the reasons for the growing gap, and justify how their pay levels are set.

What actions can organizations take?

1

Understand all factors in your organization and market.

Industry and market context matters in understanding and communicating the wage gap for your company. Industry & operating model, along with local market forces & conditions, can affect the size of the pay gap between top and bottom earners. For example, a retailer will have a different type of pay gap, and different reasons for it, than a professional services company.

3

Be open and transparent.

Some employees believe their pay is set arbitrarily. This makes it important to communicate a clear and consistent method for setting your pay levels, and what the pay policies are for your company. Make it clear what the job levels mean, and how their pay is determined.

2

Turn it into an opportunity.

Show your people a transparent career path, and the opportunities for development within it. With a bigger gap between top and bottom pay, there is a bigger gain with each promotion achieved. Help your people to develop themselves to take advantage of this opportunity by showing them a documented career path.

You will also achieve greater loyalty & encourage your top talent to stay.

If you're looking to get your pay right, Korn Ferry has the tools and expertize to help. Combining the world's most comprehensive pay database

with detailed insights and analytics, you can align and optimize your pay program with your organizational strategy to achieve success.

For more information on how we can help you optimize your pay programs get in touch with your local Korn Ferry representative or visit our website:

pay

Korn Ferry is a global organizational consulting firm. We help clients synchronize strategy and talent to drive superior performance. We work with organizations to design their structures, roles, and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop, and motivate their people.

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