Salaries across APAC are predicted see a rise of 7% on average in 2014, with Vietnam and India experiencing the largest salary increases with 11.5% and 11% respectively. Such large margins, however, are partially due to steady rises in inflation. Currently, Hong Kong and Singapore are set to jump 4.5%, while Japan will see the lowest increase at just 2.3%.
Asia at a glance
Such findings, taken from The APAC Salary Budget Planning Report released by Towers Watson, support the comparative growth of Asia’s emerging economies. Southeast Asian nations currently have the highest economic growth rates at around 6%-8.5%, but also have equally high inflation rates. With inflation as high as 7% in some economies, companies must reflect this adjustment when calculating their salary increases. For other APAC countries, the steady rise in salary rates shows the growing concern in finding and retaining skilled talent.
Sambhav Rakyan, Global Data Services practice leader, Asia Pacific at Towers Watson explained, “People may say ‘it’s not about the money,’ but the reality is that base pay is the number one driver for attraction and retention globally.”
Hong Kong outlook
With inflation forecast at 3.5% next year, the projected salary increase for employees in Hong Kong amounts to just 1% in real terms, according to ECA’s 2013/2014 Salary Trends Survey, which surveyed 112 companies in the city. Despite this marginal increase, salaries are expected to increase at the same rate as 2012-13, creating a degree of stability for workers in Hong Kong.
Lee Quane, regional director, Asia, ECA International explained, “A wage increase of just 1% after adjusting for inflation means that employees in Hong Kong will receive some of the lowest wage rises in the world next year in real terms. On a more positive note, this real wage increase is actually higher than the increase recorded in 2012, and roughly the same as the one recorded here for 2013.”
Despite consistency within salary rises in Hong Kong, Quane warned this could lead to economic stagnation in the coming months and the risk that the city could lose its competitiveness as an international financial hub and its appeal to global talent.
Paul Arkwright
Publisher
