Anyone else frustrated with salary compression?
Discussion
Hi,
This isn't a dig at my employer as they pay roughly the going rate (maybe a little below but then I haven't had to sell my soul to them unlike some other better paying companies).
About ten years ago there was a difference of around £40k between a graduate and the level I'm now at in the sector. Someone who had recently become professionally qualified with the body would then be probably be about £30k less than the level I'm now at. In recent years the gap has reduced to as little as £25k for a graduate and £15k for recently professionally qualified, with the typical salaries of what I'm at and the more senior positions above me having not significantly increased in that same time frame.
Is anyone else getting frustrated within their industries that over the past two or three years the junior tiers (e.g. graduates and just above) are rapidly closing in on the seniors in terms of pay and overall package?
(Winge over)
Thanks,
This isn't a dig at my employer as they pay roughly the going rate (maybe a little below but then I haven't had to sell my soul to them unlike some other better paying companies).
About ten years ago there was a difference of around £40k between a graduate and the level I'm now at in the sector. Someone who had recently become professionally qualified with the body would then be probably be about £30k less than the level I'm now at. In recent years the gap has reduced to as little as £25k for a graduate and £15k for recently professionally qualified, with the typical salaries of what I'm at and the more senior positions above me having not significantly increased in that same time frame.
Is anyone else getting frustrated within their industries that over the past two or three years the junior tiers (e.g. graduates and just above) are rapidly closing in on the seniors in terms of pay and overall package?
(Winge over)
Thanks,
Minimum wage has risen a lot in the past few years, c.£25k (FTE), which certainly doesn't help matters.
Clearly the skillset is in demand, how long have you been with your employer and how long have you been in your current role?
Of the recent hires, at higher starting salary, what are there salaries?
Clearly the skillset is in demand, how long have you been with your employer and how long have you been in your current role?
Of the recent hires, at higher starting salary, what are there salaries?
Is this part of the whole issue over the UK just paying pretty poor salary overall?
I have little knowledge of this but I've heard it many times. I would have shrugged this off but the US company I work for offered and paid more (a lot more) to than other UK companies I interviewed for.
I have little knowledge of this but I've heard it many times. I would have shrugged this off but the US company I work for offered and paid more (a lot more) to than other UK companies I interviewed for.
aproctor1 said:
Minimum wage has risen a lot in the past few years, c.£25k (FTE), which certainly doesn't help matters.
Clearly the skillset is in demand, how long have you been with your employer and how long have you been in your current role?
Of the recent hires, at higher starting salary, what are there salaries?
£100k puts you in the top 4% of UK salaries, and yet it's only 4 times the minimum wage.Clearly the skillset is in demand, how long have you been with your employer and how long have you been in your current role?
Of the recent hires, at higher starting salary, what are there salaries?
I've made this comment before, but you need to be in a pretty good role to get to £100k, and yet you are deemed to only but worth 4 times the legal minimum you can be paid, for say screwing caps on to toothpaste tubes.
£25k = £21k net. £100k = £67k net. So actually is 3.2 times after tax and NI. Which is not a lot of difference.
Another issue is, because the minimum wage keeps rising (as notes above), where's the motivation for people earning just above it now ?
Say you are on £10/hour screwing caps on. Your supervisor is on £12/hour, together with all the extra hassle etc. Then then the person on £10/hour goes up to £11/hour. Does the person on £12/hour get the same increase ? Highly unlikely - so where's their motivation ? There isn't any. Why bother for an extra quid ?
There does seem to be societal move where salaries are being compressed more and more; whereby 3.2 times income range covers 96% of the UK's salary range.
snuffy said:
aproctor1 said:
Minimum wage has risen a lot in the past few years, c.£25k (FTE), which certainly doesn't help matters.
Clearly the skillset is in demand, how long have you been with your employer and how long have you been in your current role?
Of the recent hires, at higher starting salary, what are there salaries?
£100k puts you in the top 4% of UK salaries, and yet it's only 4 times the minimum wage.Clearly the skillset is in demand, how long have you been with your employer and how long have you been in your current role?
Of the recent hires, at higher starting salary, what are there salaries?
I've made this comment before, but you need to be in a pretty good role to get to £100k, and yet you are deemed to only but worth 4 times the legal minimum you can be paid, for say screwing caps on to toothpaste tubes.
£25k = £21k net. £100k = £67k net. So actually is 3.2 times after tax and NI . Which is not a lot of difference.
Another issue is, because the minimum wage keeps rising (as notes above), where's the motivation for people earning just above it now ?
Say you are on £10/hour screwing caps on. Your supervisor is on £12/hour, together with all the extra hassle etc. Then then the person on £10/hour goes up to £11/hour. Does the person on £12/hour get the same increase ? Highly unlikely - so where's their motivation ? There isn't any. Why bother for an extra quid ?
There does seem to be societal move where salaries are being compressed more and more; whereby 3.2 times income range covers 96% of the UK's salary range.
snuffy said:
£100k puts you in the top 4% of UK salaries, and yet it's only 4 times the minimum wage.
I've made this comment before, but you need to be in a pretty good role to get to £100k, and yet you are deemed to only but worth 4 times the legal minimum you can be paid, for say screwing caps on to toothpaste tubes.
£25k = £21k net. £100k = £67k net. So actually is 3.2 times after tax and NI. Which is not a lot of difference.
Another issue is, because the minimum wage keeps rising (as notes above), where's the motivation for people earning just above it now ?
Say you are on £10/hour screwing caps on. Your supervisor is on £12/hour, together with all the extra hassle etc. Then then the person on £10/hour goes up to £11/hour. Does the person on £12/hour get the same increase ? Highly unlikely - so where's their motivation ? There isn't any. Why bother for an extra quid ?
There does seem to be societal move where salaries are being compressed more and more; whereby 3.2 times income range covers 96% of the UK's salary range.
You make an interesting point around the multiplier on minimum wage/National Living. The only thing I'd say though is that £1.75k a month versus £5.58k in real terms a month is actually a heck of a lot of purchasing power difference. A typical 75% mortgage on a detached family home is around £1.5-2k a month for example. Throw in council tax (£180), food bills (£500), car insurance (£100+) and 3.2 multiplier is a huge standard of living difference. The argument for the Living Wage/Minimum wage to keep increasing is that the cost examples I just used show that those at the bottom have a rather large challenge to a decent standard of living - especially if they have children.I've made this comment before, but you need to be in a pretty good role to get to £100k, and yet you are deemed to only but worth 4 times the legal minimum you can be paid, for say screwing caps on to toothpaste tubes.
£25k = £21k net. £100k = £67k net. So actually is 3.2 times after tax and NI. Which is not a lot of difference.
Another issue is, because the minimum wage keeps rising (as notes above), where's the motivation for people earning just above it now ?
Say you are on £10/hour screwing caps on. Your supervisor is on £12/hour, together with all the extra hassle etc. Then then the person on £10/hour goes up to £11/hour. Does the person on £12/hour get the same increase ? Highly unlikely - so where's their motivation ? There isn't any. Why bother for an extra quid ?
There does seem to be societal move where salaries are being compressed more and more; whereby 3.2 times income range covers 96% of the UK's salary range.
I wonder if OP works in Finance & Accounting by any chance - because I certainly am seeing wage stagflation in this industry. The salaries offered during Covid have vanished and where I was once a good salary for my role, I'm now priced out of every vacancy because firms have softened their offers in the last 12 months. Grads are typically on £30-35k, level 6 (qualified) are typically £45k and 7-10 years experienced around £70-80k on the South Coast.
MBVitoria said:
snuffy said:
aproctor1 said:
Minimum wage has risen a lot in the past few years, c.£25k (FTE), which certainly doesn't help matters.
Clearly the skillset is in demand, how long have you been with your employer and how long have you been in your current role?
Of the recent hires, at higher starting salary, what are there salaries?
£100k puts you in the top 4% of UK salaries, and yet it's only 4 times the minimum wage.Clearly the skillset is in demand, how long have you been with your employer and how long have you been in your current role?
Of the recent hires, at higher starting salary, what are there salaries?
I've made this comment before, but you need to be in a pretty good role to get to £100k, and yet you are deemed to only but worth 4 times the legal minimum you can be paid, for say screwing caps on to toothpaste tubes.
£25k = £21k net. £100k = £67k net. So actually is 3.2 times after tax and NI . Which is not a lot of difference.
Another issue is, because the minimum wage keeps rising (as notes above), where's the motivation for people earning just above it now ?
Say you are on £10/hour screwing caps on. Your supervisor is on £12/hour, together with all the extra hassle etc. Then then the person on £10/hour goes up to £11/hour. Does the person on £12/hour get the same increase ? Highly unlikely - so where's their motivation ? There isn't any. Why bother for an extra quid ?
There does seem to be societal move where salaries are being compressed more and more; whereby 3.2 times income range covers 96% of the UK's salary range.
Maybe this is why (sweeping generalisation) every employee you deal with in the UK seems useless - no-one give a toss?
snuffy said:
Say you are on £10/hour screwing caps on. Your supervisor is on £12/hour, together with all the extra hassle etc. Then then the person on £10/hour goes up to £11/hour. Does the person on £12/hour get the same increase ? Highly unlikely - so where's their motivation ? There isn't any. Why bother for an extra quid ?
It's not "extra" hassle, it's "different" hassle, and possibly more interesting / enjoyable (for a start you won't be screwing toothpaste caps on! 
)Somebody on £100k a year isn't doing 4 x the work of somebody on £25k a year. It's just work that is deemed by the Employer to be a higher value.
Sheepshanks said:
It's even worse if you've got a couple of kids as you lose £2K in child benefit.
Worse, that all disappears when you hit 60kAnd worse, worse, the government has done nothing to move the goal posts in the 10 years since they brought the new rule in which was flawed from the start (why would they?) Thousands of people have been dragged into it as high inflation with wage rises just to keep pace and earning the equivalent of what was about 45k10years ago
Countdown said:
It's not "extra" hassle, it's "different" hassle, and possibly more interesting / enjoyable (for a start you won't be screwing toothpaste caps on! )
Somebody on £100k a year isn't doing 4 x the work of somebody on £25k a year. It's just work that is deemed by the Employer to be a higher value.
It depends; if person A is screwing on 1 cap an hour, and person B is screwing on 4, then you could say person B is doing 4 times the work of person A. )Somebody on £100k a year isn't doing 4 x the work of somebody on £25k a year. It's just work that is deemed by the Employer to be a higher value.
But yes, in general, they will be doing different work, one of which is deemed to be of higher value.
Countdown said:
snuffy said:
Say you are on £10/hour screwing caps on. Your supervisor is on £12/hour, together with all the extra hassle etc. Then then the person on £10/hour goes up to £11/hour. Does the person on £12/hour get the same increase ? Highly unlikely - so where's their motivation ? There isn't any. Why bother for an extra quid ?
It's not "extra" hassle, it's "different" hassle, and possibly more interesting / enjoyable (for a start you won't be screwing toothpaste caps on! )Somebody on £100k a year isn't doing 4 x the work of somebody on £25k a year. It's just work that is deemed by the Employer to be a higher value.
The British disease is more specifically:
1) Outrageous multiples (hundreds or thousands) for chief execs of FTSE companies, which have only ever gone up year on year regardless of performance.
2) Squeezed middle taxation / fiscal drag which kills incentive.
https://highpaycentre.org/wp-content/uploads/2023/...
Edited by Hammersia on Monday 26th February 12:22
pb8g09 said:
I wonder if OP works in Finance & Accounting by any chance - because I certainly am seeing wage stagflation in this industry. The salaries offered during Covid have vanished and where I was once a good salary for my role, I'm now priced out of every vacancy because firms have softened their offers in the last 12 months. Grads are typically on £30-35k, level 6 (qualified) are typically £45k and 7-10 years experienced around £70-80k on the South Coast.
Which for 7-10 years experience, is not much of an increase. £30k to £45k = 50% of course. My own salary over the first 7 years of my working life increased 250%. Then the rate of slowed however.Depends on the job of course; you hear people say "I've got 30 years experience in this job", yes, but after 10 minutes you have learnt all there is to learn, so 30 years in not really relevant to your pay.
The premise that some work doesn't deserve as much as other work that comes out of threads like this is so backwards.
We should be starting from the premise that everyone is paid a wage they can comfortably live on, not holding back junior employees so senior people feel better.
If you want more money go find it.
We should be starting from the premise that everyone is paid a wage they can comfortably live on, not holding back junior employees so senior people feel better.
If you want more money go find it.
snuffy said:
Hammersia said:
I don't think 3 / 4times salary multiples are that outrageously low, bearing in mind the older employee brought their house for comparative buttons decades ago.
That's only an argument if you think your pay should be linked to your outgoings. snuffy said:
Hammersia said:
I don't think 3 / 4times salary multiples are that outrageously low, bearing in mind the older employee brought their house for comparative buttons decades ago.
That's only an argument if you think your pay should be linked to your outgoings. Why do you assume that the higher earners are that much older? - I'm 32, I didn't buy my house for buttons. My neighbours did- and their wives never worked a day in their lives (their words) and husbands all retired at 60, yet they earned half what I do and live in bigger houses. That's the real kick in the b
ks for me - not what the grads are earning.pb8g09 said:
snuffy said:
Hammersia said:
I don't think 3 / 4times salary multiples are that outrageously low, bearing in mind the older employee brought their house for comparative buttons decades ago.
That's only an argument if you think your pay should be linked to your outgoings. Why do you assume that the higher earners are that much older? - I'm 32, I didn't buy my house for buttons. My neighbours did- and their wives never worked a day in their lives (their words) and husbands all retired at 60, yet they earned half what I do and live in bigger houses. That's the real kick in the b
ks for me - not what the grads are earning.At 32 you've nothing to complain about.
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