(Source: Chinapost | August 18, 2015)
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 percent), 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 double-digit 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.