The World Pay Report 2008 finds that British managers have one of the lowest levels of disposable income in the world. UK executives are the fifth poorest in real terms, ahead of only Indonesia and the highly expensive Scandinavian economies. British managers come 47th in the real pay stakes out of 51 economies analysed.
The study also reveals a downward trend for management purchasing power in Britain, with this year's ranking significantly worse than last year (40th out of 47).
The UK's lowly ranking reflects the combination of high tax rates and cost of living relative to developing economies, the study concludes.
Hay Group's Peter Christie says disposable income is likely to erode even more as the economic downturn continues to bite and inflation remains high.
"British companies will be increasingly constrained by tightening budgets over the coming year. Pay rises will be driven by what companies can afford, rather than what's needed to compete in the global management market," he said.
"As a result, UK firms could risk a brain drain to higher growth economies, as executives seek better standards of living. "
Senior managers in the fast-growth economies of the Middle East, Asia, and Eastern Europe enjoy the highest spending capacity, as demand for management talent far outstrips supply in these markets.
