Global pay slow­down hits in 2014

Business First - - NEWS -

Pay rises across the world are in de­cline and Aus­tralian wage earn­ers are not im­mune.

The lat­est pay fore­cast data from global man­age­ment con­sul­tancy, Hay Group shows that pay in Aus­tralia is fore­cast to grow by 3%, which rep­re­sents a de­cline of 1% on last year’s growth rate. This is the slow­est growth rate seen since the GFC, show­ing a sign of cau­tious­ness within the Aus­tralian mar­ket.

Glob­ally pay is set to in­crease by 5.2% on aver­age but rises for 2014 are ex­pected to aver­age 0.3% less than last year’s fore­casts (5.5%).

Fast-growth mar­kets will see the big­gest salary rises. How­ever, high in­fla­tion means real in­come will fall in many coun­tries.

Salaries in Asia are ex­pected to in­crease by an aver­age of 7%– 0.2% less than the rise in 2013, re­flect­ing slow­ing but still strong eco­nomic fore­casts. The high­est in­creases will be seen in Viet­nam (11.5%), In­dia (10.9%), In­done­sia (10%) and China (8.6%).

Hay Group’s re­search is based on the salary ex­pec­ta­tions of more than 22,000 or­gan­i­sa­tions in 71 coun­tries world­wide, rep­re­sent­ing 15 mil­lion em­ploy­ees.

Steve Paola, se­nior con­sul­tant at Hay Group, com­ments: “This year’s global fore­cast high­lights a sig­nif­i­cant slow­down of pay rises into the new year, as GDP growth in many parts of the world re­mains sub­dued.

“Even where op­ti­mistic rises are ex­pected in fast grow­ing mar­kets, high in­fla­tion means the eco­nomic re­cov­ery won’t be felt in the pay pack­ets of em­ploy­ees in many coun­tries.”

Paola adds, “In times of slow-growth, Aus­tralian or­gan­i­sa­tions must keep a keen eye on the bot­tom line to re­main com­pet­i­tive – min­imis­ing costs and driv­ing pro­duc­tiv­ity. Yet, there is an op­por­tu­nity for or­gan­i­sa­tions to be cre­ative about how they re­ward their people – go­ing be­yond cash. It’s about spend­ing smarter, not more, and re­view­ing re­turn on re­ward spend.

“Se­cur­ing the com­mit­ment of em­ploy­ees by de­vel­op­ing clear ca­reer man­age­ment plans, nur­tur­ing key talent and cre­at­ing a buzz around the com­pany’s vi­sion can also play a role in en­gag­ing and re­tain­ing em­ploy­ees over the long-term.”

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