If the next step in your expansion process is to hire a European workforce, there are important factors to consider. Although partially homogenized, no salary scheme exists in the European Union (EU), thus, generating different expectations across countries. To give insight on this topic, this blog post outlines essential elements to consider during your European recruitment process.
Different countries = Different salary expectations
Home to 28 countries and 512MM citizens, the European Union (EU) accounts for 30% of the world’s GDP. It is the biggest exporter of manufactured goods and services, as well as the biggest import market for over 100 countries; All excellent reasons for you and your business to establish a presence in Europe. Nevertheless, the diverse cultural and geographic landscape of the EU, is also reflected on the salary expectations in each of its country’s workforce.
From the top 28 countries, employees in Denmark receive the highest salaries, averaging €3,270 monthly. By contrast, Bulgaria’s workforce is at the bottom of the ladder, earning €457 per month. Although significant, the gap is influenced by cost of living per country, with countries with high incomes experiencing higher living expenses. EuroDev’s American and Canadian clients prefer the following countries for their European recruitment process:
Salaries and unemployment
The average unemployment rate in the EU in June 2018 was 6.9%; stable when compared to May 2018 and down by .7% compared to June 2017. There is a significant correlation between average salary levels and existing high unemployment rates. Countries with high unemployment rates, above 10%, such as Italy and Spain, rank lower in average monthly salary. Conversely, Germany and The Netherlands unemployment rates are below 4%.
An outlier of this trend is Hungary, as it has the third lowest unemployment rate and low salaries. The country experienced a strong recovery from 12% in 2012 to a current 3.6%; Although impressive, this improvement is the result of a significant decline in its population.
Other factors to consider for your European recruitment process
In addition to the previously mentioned, level of education, network and most importantly, experience, are significant influences on salary expectations of employees. Urban vs suburban or rural lifestyle differences within the same country also affect these expectations. Payment equality still is a harsh reality in Europe, with men out-earning women by an average of 16.2%.
A final element to consider for your European recruitment process is the continued use of domestic currency by 9 EU state members. Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, Sweden and the United Kingdom, have not adopted the Euro, which creates the need for currency conversion.