Salaries for foreign workers are going up quicker than last year – but those in emerging markets may see wage cuts, according to new research.
Expats and overseas workers will enjoy higher pay in many countries, especially Europe where a recovery led by Ireland and Greece is under way.
However, a slowdown in growth and inflation in emerging markets such as Brazil, Russia and The Ukraine is holding back real-term wage increases.
The figures come from global management consultancy Hay Group.
The firm worked out global salaries will go up by an average 5.4% this year, slightly ahead of last year’s 5.2%.
Boost for European workers
Although workers in Brazil, Russia and The Ukraine will enjoy pay rises of over 6%, in real terms, the increase is eroded by inflation – predicted as 6.5% in Brazil and up to 10.7% in The Ukraine.
In Europe, workers in economies throttled by economic problems in recent years are starting to see a turn round, led by Ireland and Greece.
On average, salaries will rise by just over 3%, but inflation will mean in real terms, that extra pay will only be worth half that amount when it hits the bank.
The biggest pay rises in Europe will go to workers in Turkey – but that comes with some bad news.
Although wages will likely rise by up to 9%, inflation is running at 8.9%, so effectively the increase is wiped out.
Rampant inflation is also ravaging Latin American pay packets.
With pay rises of 9.7% on average across the region, workers will feel no better off as inflation averages 10.7%, so they are barely treading water with a fast rising cost of living.
In Venezuela, pay is predicted to rise an astonishing 40%, but inflation of more than 60% means a real terms wage cut of a fifth for unlucky workers.
In the global economic powerhouse of Asia, workers can expect an average 6.8% pay increase and relatively low inflation means that the feel good factor of this extra cash will give workers an effective wage rise of around 3.5%.
Hay Group’s Ben Frost said: “Pay is increasing at a faster rate than last year, but we’re talking averages and salaries and inflation in each country mean many workers may not feel any benefit from a rise.
“Expats and their employers must take these factors into account when negotiating remuneration packages as what seems good on paper may not turn out as expected when out shopping.”