APAC salaries to increase 2.6% in 2019
It is expected to see the highest real-wage growth globally.
Adjusted for inflation, real-wage salaries in Asia are expected to edge up 2.6% in 2019 which is the highest globally and exceeds the expected global average real-wage salary growth of 1%, according to Korn Ferry’s 2019 salary forecast.
In Asia, actual salaries are forecasted to rise 5.6% YoY extending the 5.4% growth seen in 2018. Inflation-adjusted real wage increases are forecasted to be the highest globally, but down 0.2% from 2.8% in 2018, the report added.
“With inflation rising in most parts of the world, we’re seeing a cut in real-wage increases across the globe,” Korn Ferry’s senior client partner Robert Li said in a statement. “Asia has managed to maintain similar salary increase forecast as last year, driven by the strong economic outlook in this region and projected subdued inflation.”
In Hong Kong, the real-wage salaries are forecasted to increase 1.7% in 2019 which is similar to predictions in 2018. Meanwhile in China, employees can expect a real-wage growth of 3.2%, down from 4.2% last year.
“The Greater Bay Area initiative has brought optimism and is expected to have a further positive impact on Hong Kong and China economies in the long run,” Li noted. “This in turn, will boost salary increase expectations. However, the actual percentage of salary increase will ultimately depend on how the global and China economies perform given the uncertainty due to rising trade tensions.”
Also read: Philippine salaries to grow 6% in 2019
Korn Ferry’s experts also recommended that employers take a holistic approach when determining pay.
“We recommend that companies take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and local trading conditions,” Li highlighted. “Compensation programs needs to be regularly reviewed to make sure they align with changing business and market conditions.
Korn Ferry’s forecast is backed by a separate study conducted by Mercer which cited that APAC countries are poised to record the highest salary increases for 2019 led by Bangladesh (10%), India (9.2%) and Vietnam (9.8%).
Mercer’s study also noted that the insurance industry is likely to see a healthy salary growth amidst the projected muted expansion for the rest of the banking and financial services industry.