DUBAI — 23 July 2007 - Managers in Saudi Arabia and the UAE take home the highest disposable incomes worldwide, with pay equating to buying power in excess of $222,000.
In the rankings of the World Pay Report 2007 released by the global management consultancy Hay Group, managers from the two GCC countries are significantly ahead of the developed nations, including the US and the UK, figuring low at 24 and 40 respectively.
“Senior managers in Saudi Arabia and the UAE enjoy soaring levels of take-home pay, as employers in this region pay more attention to cash rather than performance-based incentives,” said Vijay Gandhi, Reward Information Services Manager for Hay Group Dubai.
US companies face competition for top-talent not only from other US companies, but also from companies in other countries that have a lower cost of living and a lower tax rate, research from Hay Group revealed.
“Companies are operating in an increasingly open and competitive global economy, and emerging markets are offering managers higher disposable incomes than established countries – which is making these locations an attractive prospect for management talent,” said Iain Fitzpatrick, Director Reward Information Services for Hay Group North America. Hay Group’s research showed that management in the US is poorly paid compared to emerging economies. American managers are ranked just 24th in the world pay league table of 47 countries, with a buying power equivalent to an average salary of $104,905 when tax and cost of living are taken into account.
The survey not only looked into the salaries and benefits of executives, but also relative purchasing power with cost of living and taxation levels in different countries as indices to tabulate disposable incomes.
Saudi Arabia, which topped the list, boasted of average disposable incomes of $229,325 per year for managers. The UAE came second with disposable incomes of $223,939. “But as demand for experienced managers remains high, companies in the region are looking more closely at the use of long-term incentives as a way of attracting and retaining international talent.”
Hong Kong ranked third with pay buying power equivalent to $203,947 followed by Russia, Turkey, Mexico, Ukraine, Thailand and Singapore.
In comparison, the US had management incomes of less than half those in the GCC nations at $104,905 along with UK with $86,367. Tax-free incomes considerably boosted the disposable income levels in the oil-blessed nations, the report observed. Emerging economies of Eastern Europe too seemed to redraw the world pay map with managers in Russia, fourth in the list, getting disposable incomes of about $157,348, Ukraine, which stood seventh, with 149,118, Poland eleventh with $128,537 and Lithuania 18th $122,941.
The report said continued growth of emerging markets was creating unprecedented demand for management talent. "The resulting talent shortage, plus the premiums paid to managers in these hot markets, is inflating management pay in less advanced economies," the report said.
Affluent western countries like Finland, Denmark, Sweden, Norway and Canada ranked 40th or below while Australia (26th) and Japan (27th) figured midway. The international finance and trade centre of Hong Kong ranks third, with pay buying power equivalent to $203,947.
“Pay rates for management have traditionally been high in Hong Kong – up to more than a third higher than other Asian cities such as Singapore – with management buying power enhanced by low rates of income tax,” said Hern Yin Goh, Reward Information Services Manager for Hay Group China.
While the UK is ranked just 40th in the management pay stakes, Germany is placed just 19th, with France 31st, and Italy 28th. Only Spain, where the cost of living is lower, remains reasonably placed, taking 12th spot with disposable incomes of around $128,197.
In comparison, China’s rapid economic development is reflected in disposable incomes at management level averaging $126,281 - placing the country 14th in the world pay table.
However, despite its impressive economic development, the picture is far less encouraging in India. At 36th in the global pay stakes, managers in the country have buying power of just $92,750.
“Chinese companies have realised the need to attract management talent as economic acceleration continues apace, having a significant upward impact on managers’ pay,” said Hern Yin Goh.
“However, India benefits from a large tier of well educated, English-speaking local talent, making management pay more immune to the international market. That said, managers’ pay is increasing at double-digit rates in India — between 15-20 per cent — so it is unlikely to stay at the bottom of the pay table for long.”
“The continued growth of emerging markets is creating unprecedented demand for senior talent,” said Steve Marsden, Global Director of Reward Information Services at Hay Group. “The resulting talent shortage, plus the premiums paid to managers in these hot markets, is inflating management pay in less advanced economies.”
COMMENTS FROM Librahitech:
Hats off to the Managers in the U.A.E. However, when looking at the other side of the coin, it paints a grim picture. A worker is paid a paltry AED.3.50 per hour, and in some cases a mere AED.3.00 per hour (which is AED.720.00 a month or 60 frozen chickens), by these great companies in the U.A.E. from where these Great Managers take home such gigantic pay packets. These Managers really do suck. Woe betide them.