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Research shows regional variations in managers’ pay


Research by Incomes Data Services shows that there are now greater regional variations in earnings for managers than for other employees.

The latest issue of IDS Management Pay Review looks at the extent of regional variations in managers' earnings, based on official survey data collected in April 2001. It concludes that, 'rather than managerial pay running at similar levels across most of the country while manual wages vary greatly, the reverse seems to be the case'. Overall, the figures show a 50 per cent difference in the average earnings of managers between the lowest and highest paying regions, while the variation for clerical and manual jobs is closer to 30 per cent.

IDS cites the example of general managers of large organisations to illustrate the extent of variations. The earnings of this group averaged nearly £113,000 across the UK as a whole, based on April 2001. When analysed by region, however, enormous variations open up: while general managers of large organisations working in London earned an average of £139,518, those working in Scotland averaged £57,788. Other potentially mobile well-paid occupations such as treasurers and company financial managers demonstrated similarly wide regional earnings variations.

The report suggests that the conventional view on mobility may be overstated. Like most employees, most managers are in practice unwilling to uproot themselves - and their families - to move regions in pursuit of higher rewards. If this is the case, then local cost-of-living factors, most notably housing, may play a much bigger role than previously thought in determining managerial earnings. An analysis of regional house price variations against managerial earnings' differences shows a remarkably close fit. IDS suggests that the combination of differential house prices, plus employers' ability to vary the generally higher pay rates of managers substantially to maintain 'real' standards of living, seems the most likely explanation for the emergence of such large regional variations in managers' earnings.

The Management Pay Review can be purchased from Incomes Data Services.


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