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A new study looks at income differences based on age, gender and company size

A short while ago a new study was published on gehalt.de, offering new insights into income levels at various career stages. For this, the data of 220 000 managers and expert personnel was analyzed. Here is a short summary of the results:


The salary increases with age


In Germany, a man at the age forty who has a degree, is most likely to earn a good salary; Especially if he is employed by a big company in the financial or automotive sector. This in itself might not be news to anyone who knows the market, but the study goes deeper, looking at various factors like level of education, gender, and company size.


That more job experience pretty much guarantees better income shouldn’t be much of a surprise either. A fifty year old in a leadership position or with specialized training earns, on average, 58 000 Euros, which is about twice the average income of someone first entering the work force. Statistically, the peak is reached at 60, when the average is nearly 61 000 Euros. However, there are fairly wide ranges here already: Specialized personnel enjoy a fairly steep rise of income during their first years on the job. However, at around 45 that levels out. Unless the person is picking up some additional responsibilities, a leadership role or budgetary responsibility, they won’t have a lot more gains (or even slight decrease in buying power) of income until retirement. Managers, even team leaders, are a different matter entirely. Their first twenty years (between 25 and 45) show an average gain of 46 000 Euros, and although the increase won’t be as high after that, the figure continues to go up.


Differences between men and women


Next comes a fact which we have looked at in the past: once again, the study confirmed that women tend to earn less than men, even if the job and other surrounding factors are roughly the same. And that although both genders start out their professional careers more or less on the same terms. A male skilled worker on average earns 4500 Euros per year more than his female counterpart, in the lower management the difference is exceeds 13 000 Euros. As they get older, the difference in pay increases to 20 000 or even up to 40 000 Euros annually.


Another thing that catches the eye is that the point when pay increase over time stagnate differ. For women, that happens much earlier, even before the age of forty. The main reason for this is the structure of many “female dominated” branches of industry where opportunities for advancement are very limited and pay is generally bad – mainly service jobs like coiffeur, nursing or child care. Even a high level of education scarcely diminishes this problem. They often only slightly raise the pay at which the salary stagnates.


What about various levels of professional training?


For both sexes, higher education pays. That is also true if an academic degree is acquired “late”, several years after entering the work force, or via “second” or “third chance” educational programs. Without the investment into higher education, laborers tend to get stuck at a salary of 36 000 Euros a year. A university diploma or Master’s degree could boost the yearly income to twice that number. For Master craftsmen and certified experts, the title might well earn them another 15 000 Euros per year.


For those in leadership positions, the situation is similar. For them, too, higher education is the key for achieving higher salaries, up to 100 000 Euros on average. Bachelor or FH degrees holders have to be contend with almost 40% less, though. Even decades after leaving the university, the degree still continues to have an effect: After the age of 55, academic degree holders still have enjoy another increase in salary of about 20 000 euros. At that time in life, those who only did an apprenticeship or job-concurrent studies, barely have any more gains. The main reason for this is that their careers tend to get stuck earlier, especially in big companies. The effects of academic titles like PHDs are so different depending on the field of industry that no general conclusions can be drawn and thus were not included in this study.


Whether a degree really becomes a career booster largely depends on the field of study, though. While the STEM fields are generally an almost guaranteed career starter, the humanities or art sciences tend to be less of a help. This also plays into the differences between men and women, as you generally find a lot more males in the natural sciences than women, with the picture being reversed in the humanities and cultural sciences. Chemical, pharmaceutical and medical sciences are an exception, with an almost even ratio, only slightly tipped toward women.


The field of industry is key


Not surprisingly, economists of both sexes tend to seek employment at a consulting agency or auditing companies after finishing their studies. That’s not a bad idea, especially if you stay in those fields, which is not easy (and many don’t plan to do in the first place), given the hours and prevailing stress. Who stays and moves up can enjoy the highest salaries given to low-level leadership positions. And if the career continues pretty much straight, at age 50, there’s a chance for a top-salary of 150 000 Euros, plus the bonuses one hears so much about. Also profitable are leadership positions in the financial sector. Who makes it here through their 60th birthday can expect more than 150 000 Euros. Pharma has turned into a third top industry.


In the mentioned pharma sector specialists in general are paid above average salaries. Specialist personnel also find good conditions at consultancies, in the automotive industry and aviation. During the past six months semiconductor and telecommunication industries were among the best as well.


On the other hand, for those who would like to do “something with people or media” things look a bit different. Here the job might often lead to personal fulfilment, but rarely a good salary. Here especially, the service sector pays below average. Bottom of the list are jobs in call centers and in gastronomy. The maximum salary, usually achieved between 35 and 45, is around 30 000 Euros. Older personnel tend to earn less. Things don’t look much better in handy craft, retail and the leisure and tourism sector. On average, specialized personnel here never even reach 40 000 Euros. Things don’t look much different for leadership positions here. Gastronomy, crafts or temporary employment do not hold much potential for high salaries, just as in advertising and public relations. At least leadership positions in the latter fields offer some significant salary increases of salary over time. With an average of 40 000 Euros for a leadership position in the temporary employment field, by the age of 60, the number can have doubled.


Big companies and corporations tend to pay more


Good communication, little bureaucracy and few hierarchies, there are many reasons for wanting to for a small company. Income isn’t one of them. At big companies and corporations, the average salaries are significantly higher. During the early stages of a career, the difference isn’t that big, but as the years pass, it grows. A 50 year old specialized worker at a company with less than 50 employees can expect about 38 000 Euros. A big company often offers about twice that amount.


On the whole, the study did not reveal any ground breaking new developments, but it does offer a good overview of the current situation and opportunities in Germany.

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Herr Daniel Stock d.stock(@)top-jobs-europe.de