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Pay gap between management and employees widening: Study

This article is more than 12 months old

The pay gap between senior managers and entry-level employees has widened here, a new study claims.

It found that the gap grew by 12.1 per cent from 2008 to 2017, a trend reflected in much of the world.

The study by consultancy Korn Ferry looked at the typical pay for directors or senior managers, divided it by the typical pay for graduate trainees or skilled manual workers and compared the figure over the decade.

The gap increased in 77 per cent of 58 countries Korn Ferry analysed, with the average increase in Asia coming in at 15.3 per cent across nine countries.

Singapore's 12.1 per cent was the fourth highest rise in the region, behind India at 66 per cent, Malaysia at 14.7 per cent and Indonesia's 12.7 per cent.

The firm has data on around 105,000 people here.

Mr Kartikey Singh, Korn Ferry Singapore's associate client partner, noted that the average increase in Asia seems moderate for a 10-year period.

This could be because while senior level pay has risen steadily due to high demand for talent that can help a business expand, economic and inflationary growth have also contributed to significant salary increases at a lower level.

But "as businesses feel the pressure of technological disruption and the crunch of good middle- and top-level leaders, the gap might widen at a faster pace", Mr Singh noted, adding that this could make it difficult for organisations to hire talent if senior management and executive pay are questioned by the public.

A Manpower Ministry spokesman said that its data shows that the wages of rank-and-file employees here has consistently grown faster than those of senior management over the past five years.