Pay hikes in Asia-Pa­cific seen in 2015

The China Post - - INTERNATIONAL - BY KATE PE­DROSO

Salaries across Asia- Pa­cific are ex­pected to in­crease by an av­er­age of 7.3 per­cent in 2015, with wages in the Philip­pines ex­pected to rise by 6.5 per­cent, a re­cent la­bor mar­ket study showed.

“Asia- Pa­cific’s emerg­ing mar­kets con­tinue to lead the world in terms of real wage growth, with salary in­creases just 10 per­cent lower than pre- fi­nan­cial cri­sis lev­els, com­pared to the U. S. and Europe which re­main 20- 30 per­cent adrift,” said global con­sult­ing firm Mercer in its re­cently re­leased an­nual la­bor mar­ket re­search.

Salaries in In­dia and Viet­nam are ex­pected to in­crease by dou­ble dig­its this year (10.8 per­cent and 10.3 per­cent, re­spec­tively), the high­est lev­els in the re­gion, fol­lowed by In­done­sia (9.4 per­cent), main­land China (7.9 per­cent) and the Philip­pines (6.5 per­cent).

Other coun­tries in­cluded in the study were Thai­land, where salaries are ex­pected to go up by 5.9 per­cent, Malaysia ( 5.7 per- cent), South Korea ( 4.9 per­cent), Hong Kong ( 4.6 per­cent), Sin­ga­pore ( 4.1 per­cent), Re­pub­lic of China ( Tai­wan) ( 3.9 per­cent), Aus­tralia ( 3.5 per­cent) and Ja­pan ( 2.2 per­cent).

Salary fig­ures and fore­casts are based on Mercer’s To­tal Re­mu­ner­a­tion, Salary Move­ment Snap­shot sur­veys and bi- an­nual Mar­ket Pulse Sur­veys.

How­ever, Mercer also points to “real wage growth” as an im­por­tant in­di­ca­tor.

“While salary in­creases in some emerg­ing mar­kets across the re­gion re­main at dou­ble dig­its or high sin­gle dig­its ( Viet­nam, In­dia, and In­done­sia), real wage growth ( which is mea­sured as salary in­creases mi­nus in­fla­tion rate) still re­mains low, due to high in­fla­tion rates in these coun­tries,” Mercer said in a state­ment.

In the Philip­pines, for ex­am­ple, with the in­fla­tion forecast at 2.5 per­cent, real wage growth is at only 4 per­cent.

But on the whole, salary in­creases for 2015 are ex­pected to be higher than in­fla­tion across Asia Pa­cific, re­sult­ing in real wage growth in the re­gion, the Mercer study showed.

“It is im­por­tant to keep growth rates in per­spec­tive,” Puneet Swani, part­ner for in­for­ma­tion so­lu­tions and re­wards prac­tice leader — Asia, Mid­dle East and Africa at Mercer, said in a state­ment. “While real wage growth is good news for emerg­ing mar­kets, on a per­cent­age ba­sis, ab­so­lute salary lev­els are still low in these coun­tries, com­pared to more de­vel­oped mar­kets.”

The study also found that the tech­nol­ogy in­dus­try has the low­est salary in­crease forecast for 2015 in eight out of 14 coun­tries in the re­gion, in­clud­ing the Philip­pines, where it was pro­jected at 5.8 per­cent.

Mean­while, the study also showed that the life sciences in­dus­try had the high­est salary in­creases forecast in seven out of 14 coun­tries. In the Philip­pines, it was at 6.7 per­cent — same as the chem­i­cal in­dus­try, and just slightly higher than the con­sumer goods in­dus­try ( 6.6 per­cent).

The study also re­vealed doubt­digit turnover rates in al­most all Asia Pa­cific coun­tries, ex­cept in Ja­pan and South Korea.

“De­spite the re­cent sta­bi­liza­tion in vol­un­tary turnover rates, the ris­ing num­bers rep­re­sent a ma­jor chal­lenge in terms of re­place­ment costs in the form of higher salaries for new join­ers, re­cruit­ment costs and lost pro­duc­tion, all of which neg­a­tively im­pacts over­all cost of oper­a­tions and mar­gins that are al­ready un­der close scru­tiny,” the Mercer study said.

“Af­ter a gap of three years, we are see­ing changes in hir­ing in­ten­tions in Asia Pa­cific,” Swani said. “The con­sis­tent hir­ing which had con­tin­ued un­abated over the past three years has be­gun to slow down. Although four or five com­pa­nies out of 10 are still look­ing to in­crease head­count, es­pe­cially in emerg­ing economies, this num­ber has de­creased from six to seven in the past few years. Sales and mar­ket­ing, tech­ni­cal/ en­gi­neer­ing and fi­nance and ac­count­ing func­tions con­tinue to lead the pack in terms of where max­i­mum hir­ing is hap­pen­ing,” he added.

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