Globally, factors such as inflation, unemployment, and economic growth define salaries. With the ongoing pandemic, countries have witnessed an increase in unemployment levels, higher inflation rates, and an economy that is in an indefinite crisis. What does it mean for salaries?
Globally, factors such as inflation, unemployment, and economic growth define salaries. Throughout 2020, with the pandemic on the rise, countries have witnessed an increase in unemployment levels, higher inflation rates, and an economy that is in an indefinite crisis.
Hence, the unprecedented salary freezes that took place in 2020 to help companies recover from primary Covid-related financial constraints are carried – up to an extent – to 2021. For example, according to a survey by ECCA international mobility consultants, New Zealand has the third-highest percentage of salary freezes in the world, and the country, although Covid-free, is entering a recession that has no equal.
Cuts, rises, and freezes
As governments strive to maintain Covid-19 in control within their borders, they sacrifice economic stability, let alone growth. Employees in non-essential retail, hospitality services, entertainment and leisure venues, close contact services such as hair and beauty salons have stayed out of work, in some countries, for many months now, and as a consequence, they have experienced the lowest salary awards. Even in eminent economies such as the UK, the US, and Australia, people working in the hardest-hit industries amid Covid aren't expecting to see salary increases any time soon. On the contrary, staff members in chemical and pharmaceutical companies, which receive hefty funding to fight Covid-19, can discuss pay rises and bonuses with employers.
Salary negotiations
Regardless of the industry you are in, you have the right to negotiate your salary with your employer on the basis of your education, professional training, years of experience, and international mobility history. Before signing a new contract as an expat or expat-to-be, identify the value you will bring to the company and its worth. Also, research the geographical region you will work in and the price of the role on the job market – both influence the salary number greatly. Remember that it is much better to start with a good first salary and move up from there than get a low rate from the get-go and spend many years to work yourself up with small increments.
If your company is familiar with the benefits of hiring expats, and you have been working with them for a while, you can still enquire about a pay rise. However, make sure your timing is right. For instance, at the end of the year, when you will receive your annual review, bring up your successes and achievements, the volume of work you produce, and the assignments you complete as reasons to receive a salary increase. Even more so, if one of your projects brought immediate benefits to the organisation, such as cost savings or increased sales. Similarly, at the end of your trial period, underline how you achieved the set objectives and the praises you received from your supervisor to explore the opportunity of a pay rise. If you feel that your salary isn't fair, you can look back to your job description and employment contract to cross-check your responsibilities and working hours. You may be humbled by the trust your employer has in you, but you should also consider a salary increase for your efforts.
If you are a beginner expat, and don't know the salaries picture in your host country, we encourage you to join our expat forum and ask for advice from expats who work in a similar industry and position in this particular country. They should also be able to help you with gross salary numbers versus net salary based on social and health insurance deductions and taxes.
High-paid employees
Sectors such as IT, engineering, banking, pharmaceutical, automotive, and telecommunications are strong industries, capable of overcoming with little loss any crisis. Hence, these sectors offer the best remuneration deals and other bonuses. According to Paylab international salary survey platform, an office manager in a power company may earn up to 30% more than an employee in a similar position in a different sector. The salary also depends on the size of the company. Large corporations of 250+ employees have the capacity to cover bigger salaries and offer expat benefits that a small company cannot afford, even if it has a goodwill. Last but not least, employees in large cities receive higher salaries due to the jobs' competitiveness and high cost of living, of course.
The future of salaries
According to ECCA, in 2021 salaries are predicted to rise globally 3%, but the actual increase may be half that. For the time being, we notice a stable recovery in Asian countries, including China, which is also expected to have the highest salary increases in 2021. In Europe, North America, and Oceania, payment inequalities, especially in lower-paid jobs, have increased as a result of the pandemic. Temporary government schemes support employees, whose type of work doesn't allow them to work from home, in order to lessen the burden of the crisis and safeguard jobs. At the same time, with kids in many countries remaining out of school as part of physical isolation measures, the gender pay gap cannot close. The salary gap, which favours men, is partly due to women who must put their career advancement on hold to stay at home with their children. Or they undertake part-time work and jobs that they are overqualified for but are less demanding so that they can cope with family obligations at the same time. Also, we cannot ignore that women are not yet dominating well-paid industries such as IT, technology, and data analytics.
The times are unprecedented, especially for expats who are used to searching for employment opportunities globally. However, one shouldn't get disappointed, and should strive to gain experience and education, and improve their skills to remain competitive in a post-Covid labour market.
