During the COVID pandemic in Europe, there was a general real wage increase. Wage support schemes by various governments – the UK’s ‘furlough’ scheme being a good demonstration – helped to stabilise businesses and public sector employees were almost all given a salary freeze at the very least. In most EU countries, statutory minimum wages also saw an increase, mitigating some of the worst wage inequality brought about by the pandemic.

But is that the full picture?

The story by industry and sector

It’s already been reported on by Pew Research Center that in the USA, the wage gains during COVID were unevenly distributed. Tech – or more generally, the ‘information sector’ – was the greatest beneficiary of the salary increase, with the average weekly wage rising by 12.3% between mid-2020 and mid-2021. The only industry with a greater salary increase was hospitality, which was returning following a near-complete shutdown in 2020! In third and fourth place were ‘company management’ and ‘finance and insurance’. What’s the common link? These are industries with specialised skills and/or senior positions with higher retention rates. This trend can also be extrapolated to Europe. Despite the truism that employees in healthcare, education and retail became more essential than ever during the pandemic, this has not been reflected in tangible salary increases.

Tech jobs are leading the pack in terms of demand, and as such this sector is the most favourable to future salary increases. The transition to hybrid and remote working has shone a light on the role that IT plays in improving a company’s internal processes and infrastructure. Fortune claims that the single most in-demand job in the UK currently is ‘data engineer’. Interestingly Fortune also suggests that this clamour for information technology roles is as much a feature of The Great Resignation as it is a direct result of the pandemic. Despite the economic downturn of the pandemic, the impact on compensation was not as widespread or severe as previous recessions. This has allowed companies to retain skilled workers and reward them for their increasing indispensability, particularly in tech and those with digital skills.

The ‘benefits race’

If rapidly rising wage increases are a source of competition amongst companies to acquire and retain the best talent, then other incentives should also be considered. The rise of hybrid and remote working, originally born out of necessity but now a preferred working option for many, is an obvious example.

UK-based research carried out by global job site Indeed found that job listings that promise the benefit of flexible working attract up to 30% more applicants than equivalent roles without flexible working. There is a new EU directive being formulated in 2022 to allow a longer period of paid paternity leave, to enable greater independence for both parental figures. A Harvard Business Review survey hinted towards this expansion of benefits, with 98% of leaders reporting their plans to newly offer or increase at least one employee benefit in the wake of COVID.

Final Thoughts

A ‘salary race’ in any sector is a significant indicator of competition between companies – whether competing over the acquisition of new talent or the retention of existing employees – and it is also a sign of a market where skilled workers and candidates hold increasing advantages.

The general salary increase that took place during the pandemic is still more complex than this, and tells a unique story. Some sectors and even certain roles have benefited to a greater extent than others, as they have responded more adeptly to the specific circumstances, and societal change, that the pandemic incurred.

As companies rush to acquire the best talent, we must also bear in mind that the pandemic has created a scenario where simply offering increasingly competitive salaries is not the only indicator of competition. There is greater investment than ever in substantive benefits and training to address employee satisfaction and maintain the work/life balance. It is worth examining these factors more closely when considering how companies move to attract talent in 2022.


Continental Search Alliance recruits for mid-level to C-suite executive positions from scalable startups to the world’s largest tech firms, combining tech and digital expertise with extensive reach across EMEA and APAC. 


Written by Tom Boughen for CSA.