Asia Salaries Seen Up 6.9% in 2014; China Leads, Japan Lags – Towers Watson Survey Finds
Salaries across Asia-Pacific are set to rise an average 6.9% in 2014, with China leading the way while Japan is expected to see no increases, after allowing for inflation according to a survey conducted by professional services company Towers Watson (NYSE, NASDAQ:TW).
Region-wide salary increases forecast for 2014 are similar to that in 2013, and down from an earlier forecast in September 2013 of 7.1%.
The Towers Watson 2013-14 Asia-Pacific Salary Budget Planning Report drew on approximately 2,000 sets of responses covering 18 countries in the Asia-Pacific region. The survey included about 400 different companies, some of which responded for multiple countries where they have a presence. The survey was set against a regional backdrop of annual inflation little changed from 2013 at 4.1%, stronger economic growth, and a decline in the overall unemployment rate.
Salaries in China and Cambodia are forecast to rise 8% before inflation is taken into account – after inflation is built in, average increases are forecast at 5.2% and 4.1% respectively. Elsewhere in the region, salaries in Vietnam are set to rise 11.5%, Indonesia 9.6% and Malaysia 5.7%, while salaries in Hong Kong and Singapore are forecast to go up 4.5% and 4.3% respectively, Pakistan (13%) and India (10%) are expected to see the biggest increases, while New Zealand (3%) and Japan (2.3%) will see the lowest.
“In most cases, we’ve revised our salary forecasts modestly lower from our forecasts back in October 2013 mostly because clients now have a much better sense of the 2014 actual budgets and inflation is expected to be lower than previously thought,” said Sambhav Rakyan, Data Services practice leader, Asia-Pacific at Towers Watson.
Inflation across the region in 2014 is forecast at 4.1% , unchanged from 2013, but down from an earlier forecast of 4.2%.
The findings support the view that for companies in Asia-Pacific finding and retaining suitably skilled staff remains a challenge. “The expected raises for production or blue-collar workers in China, Hong Kong, India, Indonesia, South Korea and Thailand show growing pressure to find such staff.” said Mr. Rakyan.
“We hear from large-scale employers – often manufacturers – in these markets that staff hiring and retention is a constant challenge.”
In other markets, such as Malaysia, the Philippines and Vietnam, higher increases are expected in the ranks of the middle management, reflecting the relative shortage of that skills mix in those markets.
“In Malaysia, the more aggressive increase in the ranks of middle management and professionals can also be termed as a counter-attrition measure, with a large majority of companies facing retention challenges at those levels”, said Sulaxmi Prasad, Data Services practice leader, Towers Watson Malaysia.
