Same old statistics/same old complaints?
Another report citing that the proportion of total income earned by the top 1% of earners in the UK has grown from 6% to 14% in the last 30 years. (8% to 18% in the US in the same period).
An OECD study in 2010 showed that Real Income grew 110% in the 30 years to 1980, but only 11% in the following 30 years.
Are the Hard-Working of the current generation really being that hard done-by?
Or are the Fat Cats taking the cream and letting the other 99% squander?
30 years ago, the average Blue-Chip CEO remuneration was approximately 20 times the average UK earnings. Today it is nearer 200 times.
A genuine global market has seen high-skill professions explode. Coupled with massive, accelerated global growth in both the number of businesses and in the scale of businesses, the demand for highly skilled business leaders with a track record of achievement has never been higher – The supply of ‘the best’ however has not kept pace. Rudimentary supply/demand economics dictate that prices increase.
Despite huge increases in Blue-Chip, Top Table remuneration, salaries have typically decreased; Gains made instead through performance incentives, pension contributions and significantly, LTIP/Wealth Creations Vehicles.
So today’s CEOs are a lucky bunch.
Not really. Today’s large company ‘Blue-Chip’ CEO have a very big role and immense responsibility. Gone are the days of the company Rolls-Royce waiting, ready warmed, for you at 5.30pm sharp with your driver stood to attention in his peaked cap. The average CEO we spoke to works between 80 & 100 hours per week, spread over 7 days. What’s more, the majority of them have had such a work life for over 20 years to get to that position.
We asked Lord Sugar about his work/life balance. “Work Life Balance? I’ve been a s**t Father and a s**t husband. I’ve worked just about every working hour and it’s getting worse and worse. To be successful in business, you have to make compromises.”
No smooth path to Success.
Overall earnings may be better for the very top earners, justified or otherwise, but those climbing the corporate ladder aren’t having it any easier. Salary pressures are still heavily evident for the bulk of professions, and whilst outstanding opportunities are certainly returning, the expectations placed on applicants throughout the recruitment process and even more so, from Day 1 of employment are immense. Employers are seeking their pound of flesh from their aspirational high earners.
So it’s just professionals that are seeing salary/earnings pressures?
No. The lower paid are fairing even worse. Despite the introduction of the UK national wage, and the subsequent rises to £6.08 from this year, the lower income brackets are still fairing worse.
Largely through rising immigration, offshoring and the rise of new technology, semi and inskilled workers have seen their fortunes worsen. For example, since 1997, the number of foreign nationals working in the UK has risen by 2 million, far more than the 766,000 rise in employment among UK nationals. All giving downward demand/downward salary pressures (and leading to UK National attitude issues…..but thats a whole different subject)
DINKYS driving the gulf?
The final element that is causing the gulf between the Top earners and the low earners is the changing structure of Households in the UK.
The growth of one-person/single parent households typically inhibits the ability to become one of the 80-100 hour per week CEOs from above, whilst also reducing the scope for such families to benefit from the savings associated with pooling resources and sharing expenditures.
The converse element of the household structure is attributed to professional couples “assortative mating”: Top earners are increasingly pairing up. Today, c40% of working couples/partners belong to the same or neighbouring earnings deciles compared to less than 25% in 1981
So what can you do?
It really is up to you. You could do nothing. “Some guys (or girls) simply get all the breaks”.
…..Or you could speak to a recruitment specialist that can ensure you get the best chances to ensure your business, your recruitment strategy and your interests are aligned and optimised. You know where I am.