Getting a bump in salary may require managers to consider relocating to countries that are willing to pay more for talent.
Buying power—the value of money gauged by the quantity and quality of products it can buy—is greatest for managers in Saudi Arabia and the United Arab Emirates, with a tax- and cost of living–adjusted salary of $220,000, according to Philadelphia management consulting firm Hay Group’s World Pay Report. Managers in emerging economies such as Russia, Turkey, and Mexico get paid better than their U.S. counterparts: $150,000 compared to the average U.S. manger’s salary of about $105,000.
Steve Marsden, global director of reward information services at Hay Group, says growth in emerging economies has resulted in demand for senior talent everywhere. “The resulting talent shortage, plus the premiums paid to managers in these hot markets, is inflating management pay in less advanced economies,” he says.
Another aspect that sweetens the deal for managers working in emerging economies is the low taxes—or, in some cases, no taxes at all. In Saudi Arabia and the United Arab Emirates, for example, managers can enjoy an untaxed salary; and in Hong Kong, where the average annual pay is about $204,000, income taxes are very low.
Managers in the United Kingdom, Germany, and Italy have the least amount of buying power in Western Europe, and India’s buying power doesn’t stack up to the oil-rich countries either, which is largely due to a contingent of well-educated, English-speaking local talent. U.S. managers should carefully consider salary and other benefits of working abroad before making a decision to cross the pond. It could be they’d be better off working in the United States.
