Japan's salary surge could cost as much as US$468b by 2030.
Annual payrolls from APAC companies may increase US$1t by 2030 with the average pay premium at US$14,710 per year, according to a Korn Ferry study.
Hong Kong's employee shortage may cost companies up to US$38b by 2030, whilst Japan could suffer from a salary surge that may cost US$648b in total.
The study also found that smaller markets with limited workforces are likely to feel the most pressure, including Singapore and Hong Kong that may face salary premiums equivalent to more than 10% of their 2017 GDP. By 2030, APAC countries may need to pay a large extra per year per highly skilled workers, including Hong Kong (US$40,539), Singapore (US$29,065), and Australia (US$28,625).
“The new era of work is one of scarcity in abundance: there are plenty of people, but not enough with the skills their organizations will need to survive,” Korn Ferry head of rewards and benefits for the APAC region Dhritiman Chakrabarti said.
Asian giant China could see an additional wage bill of more than $342b by 2030. China’s technology, media, and communication (TMT) sector will face a jump in wage premium and may expect to pay TMT high skilled workers an additional US$13.1b.
“Whilst overall wage increases are just keeping pace with inflation, salaries for in-demand workers will skyrocket if companies choose to compete for the best and brightest on salary alone,” Chakrabarti explained.
Across the region, India is expected to be the only economy that can expect to avoid upward spiralling wages, as it will have a highly skilled talent surplus.
“Buying in talent from the market is unsustainable. Instead, companies across Asia Pacific must focus on engaging and reskilling their current workers,” Chakrabarti said.
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