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Asian salary increases well above global average according to survey
Asian workers are to continue receiving the highest salary increases
worldwide, according to the ECA International’s Salary Trends Survey
2007/2008, with average figures for the region forecast to be 7.3%, well
above the global average of 5.9%.
ECA’s survey contains information collected from multinational companies
about actual salary increases for 2007 and predicted salary increases for
2008. Including data analysis in the context of economic conditions, the
survey is used by international companies to monitor and benchmark company
salary levels in local markets around the world.
Singapore’s workers can expect salary increases of 5%. While this increase
is below the regional average, this is up on last year’s 4.5% increase –
reflecting a longstanding trend of rising salary increases in the country.
“For a developed economy country such as Singapore this level of wage
increase is high. Most other developed economies in our survey are showing
forecast wage increases of approximately 4%,” states Lee Quane, General
Manager of ECA International. “This can be explained partly by Singapore’s
robust economic growth in 2007 and partly by the fact that companies are
facing a relatively tight labour market, which looking into 2008 shows
little sign of changing.”
In Hong Kong, despite a strong economy and tight labour force, salary
increases are expected to remain at 4% - the same as in the previous two
years. This is the second lowest rate in the region and 3.3 percentage
points below the regional average.
China’s salary increases are anticipated to remain static at 8%.
“While workers in China and Singapore receive lower salaries than their Hong
Kong counterparts, the fact that they will be enjoying significantly higher
salary increases means that the salary gap between these locations will
continue to narrow,” explains Quane.
The Philippines is forecast to join India, Indonesia, Vietnam and China in
2008 as the fifth Asian country in the top ten seeing the largest salary
increases in the survey. Salary increases in the region are predicted to be
over 25% higher than they were in 2005 and for the first time the region’s
salary increases are expected to overtake those of Eastern Europe where wage
rises are showing signs of starting to stabilise.
Regionally, India and Vietnam are expected to see the biggest increases when
compared to last year’s salary rises. In India the 14% salary rise is
significantly up on last year’s highs of 12.6%, while Vietnam’s 10%
prediction shows a notable increase on the 8.5% salary increments given in
2007.
Japan is expected to experience the region’s lowest salary increases again
this year. They are forecast to remain at 3% - the same as in 2007.
Rising inflation
Within the region, real wage increases - the difference between
actual salary increases and inflation – have shown a rising trend in recent
years. However, unexpectedly fast inflation growth over the past three
months prompted by significant rises in oil, food and accommodation costs,
will counter-balance many of these high salary increases considerably. Most
locations in Asia will therefore see lower rates of real wage increases than
in 2007.
“This latest upswing in inflation, which has caught many people by surprise,
will have an impact on real salary increases in 2008,” says Quane. “When
many companies calculated salary increases for 2008, inflation forecasts
were relatively low. Inflation in Singapore, for example, is now around two
and a half times higher than anticipated in October forecasts, so employees
here are likely to experience relatively subdued real income rises in
comparison to previous years. The same goes for major economies such as
China, Korea and Taiwan.”
“The combination of lower real wage increases, together with a relatively
tight labour market in many Asian economies, will become a headache for
companies seeking to attract and retain talented staff in 2008.” Quane adds.
“Companies will need to consider revising their forecast salary increases
during 2008 or provide higher salary increases next year to make up for this
year’s relatively low increase in real incomes.”
Overview
Globally, Indian workers will again receive the largest salary
increases in 2008, which are anticipated to be 14%. India is followed by
Argentina (12.7%), Indonesia (11.3%) and Russia (11%). These high increments
are mainly the result of fast economic growth and widespread skills
shortages, which are prompting companies to pay more for talent while
keeping pace with the inevitable inflation that comes with economic
development.
At the other end of the scale, companies are forecasting that workers in
Switzerland, Japan, France Austria and Germany will be receiving the lowest
salary increases this year.
Elsewhere, the UAE is expected to see the biggest improvement on last year,
according to the survey, with salary increases forecast to be 8.7% – a whole
1.7 percentage points above last year’s rate. As this part of the world
continues to experience robust growth, other countries in the region are
also likely to record relatively high salary increases.
The biggest fall in salary increases since last year is forecast for
Slovakia. Companies there are predicting wage increases of 5.5%, down 1.3%
percentage points on last year.
Although salary increases in Eastern Europe are showing signs of
stabilising, wage growth remains relatively high there, with a regional
average of 7%. Western Europe continues to be the region with the lowest
expected salary increases, averaging 3.9% - almost 50% lower than increases
forecast for Asia.
In Latin America, companies in Argentina are forecasting salary increases to
rise from 11.3% in 2007 to 12.7% in 2008. This is almost double the regional
average of 6.4%. (Source ECA International)
BCCT/ITCC Eastern Seaboard Networking Evening
Sponsored by Lawton Asia & Shenanigans
The British & Irish-Thai chambers in cooperation with Lawton
Asia insurance brokers & Shenanigans invite you to a joint BCCT/ITCC networking
night on the Eastern Seaboard on Friday 15th February 2008 from 6.30 pm at
Shenanigans Irish Pub, The Avenue Pattaya 2nd Rd.
Lawton Asia Insurance Brokers & Shenanigans are sponsoring beverages and snacks
from 6.30 pm.
There is no fee for BCCT and ITCC members.
Non-BCCT and ITCC members will be charged THB 500 per person for entry to this
event.
Both chambers ask that members respect payment of the non-member fee on the part
of any non-member guests they may be bringing.
To book please email Peter O’Shea at: [email protected]
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