Salary differences between the United States and Europe

February 5, 2024

The United States and Europe are two of the world’s largest and most economically developed regions. And as such, they offer a wide range of job opportunities and salaries for workers. However, there are also significant differences in the wages and benefits offered in the two regions.

Table of Contents

1 United States salaries vs. European salaries

2 Why US companies recruit people in Europe

United States salaries vs. European salaries

One of the main differences between the United States and Europe is the overall level of pay. In general, wages in the United States tend to be higher than those in Europe, particularly for skilled and high-paying jobs. Part of the reason for this is that the cost of living in the U.S. is usually higher than in Europe. This means that workers need to make more money to keep their standard of living the same.

However, there are also significant salary differences within each region. In the United States, wages tend to be higher in major urban centers like New York, Los Angeles, and San Francisco, while they may be lower in smaller cities and rural areas.

In Europe, wages tend to be higher in countries with strong economies such as Germany, the United Kingdom and the Netherlands. While they may be lower in countries with weaker economies.

Another difference between the United States and Europe is the way in which salaries are determined. In the U.S., salaries are often based on how much demand there is for a job and how many people are applying for it.

If an employer wants to hire and keep the best people, they may pay them more. In Europe, minimum wage laws and collective bargaining agreements between unions and employers are often used to set salaries. As a result, wages in Europe tend to be more predictable and stable but may not be as high as those in the US.

Additionally to common salary differences, there are also variations in the benefits offered to workers in the US and Europe. In the United States, employees can get a wide range of benefits, such as health insurance, retirement plans, and paid time off. In Europe, workers often get better benefits, such as longer paid vacations and parental leave.

Overall, there can be big differences in pay between the U.S. and Europe, depending on the job and location. When comparing wages in the two regions, it’s important to think about the cost of living, benefits and job security.

Why US companies recruit people in Europe

People from Europe may be hired by US companies for a number of reasons, such as the availability of skilled and educated workers, the closeness and cultural similarities between the US and Europe, and the potential for cost savings.

One of the main reasons that US companies recruit people in Europe is the availability of skilled and educated workers. Many countries in Europe have good education systems that turn out a lot of highly trained professionals in fields like engineering, science, and technology.

As a result, US companies may find it easier and more cost-effective to hire workers from Europe rather than training and recruiting workers in the United States.

Another reason that US companies may recruit people in Europe is the proximity and cultural similarities between the two regions. The United States and Europe share many cultural, historical, and linguistic ties, which can make it easier for US companies to operate and do business in Europe.

Finally, US companies may recruit people in Europe in order to take advantage of cost savings. In general, the cost of living and doing business in Europe is lower than in the United States. This means that US companies can often save money by hiring workers in Europe. This can be a good thing for businesses that want to grow into new markets or cut costs.

Let’s see the data that TalentUp put together for Atomico’s latest State of the European Tech Report 2022. TalentUp gave an analysis that focused on ten European cities where most US companies open offices abroad.

Salaries in the technology industry vary greatly between Europe and the United States. The huge difference in tech salaries shows why US companies might want to open offices in Europe.

In the mapped tech-related roles, US employees earn nearly 40% more than their European counterparts. DevOps engineers earn nearly 60% more in the US than in Europe, followed by product managers, who earn 45% more.

Across all roles’ salaries, Stockholm deviated the least from the US average, while Warsaw deviated the most.

Overall, US companies may hire people in Europe for a number of reasons. Such as the availability of skilled workers, the closeness and cultural similarities and the chance to save money. Because of these things, it can be appealing for US companies to hire people in Europe. Especially for jobs that require specialized skills or knowledge.

With the TalentUp Salary Platform, you can search for real-time compensation data for +500 positions and +150 locations worldwide. Try it out now!