Workers in Ireland and Greece will suffer most from wage stagnation next year as businesses cut costs to survive, a study by Hay Group researchers shows.
“Salary forecasts are typically lower than last year, reflecting troubled economic times in Europe,” the consulting firm said today in a survey of employee data from 20,000 organizations. “Greece and Ireland are unsurprisingly the hardest hit. Fast-growing economies like Turkey and Russia buck the trend.”
Unemployment in Europe is running at almost 12 percent, with Greece’s jobless rate second only to Spain’s, according to data compiled by Bloomberg. Nations are cutting spending and raising taxes to trim budget deficits, increasing pressure on companies to reduce costs and limit salary growth.
Pay in Europe will rise by an average 3.3 percent in 2013, led by the Turkish, Russian and Ukrainian economies where employees can expect an increase of 8 to 10 percent, according to the study. That compares with a 5.5 percent gain in 2012.
“Employees in developed markets face a tough year ahead, with pay rises falling behind -- or barely outstripping -- inflation,” Ben Frost, global product manager at Hay Group, said in a statement. “Organizations in these countries are keen to minimize cost and drive productivity.”
Inflation in Latin America will result in the highest pay growth in 2013 at 8.9 percent, followed by Asia on 7.5 percent, the survey shows. North America will have the lowest growth at 2.9 percent, while average salaries in the Mideast and Africa, led by Egypt, South Africa and Kuwait, will jump 6 percent.
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