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In Mercer’s Compensation Planning for 2019 report, the highest salary increases in Asia Pacific in 2019 are forecast for Bangladesh (10%), India (9.2%) and Vietnam (9.8%), against a backdrop of continued strong economic and real wage growth (salary increase minus inflation rate) in emerging markets.
In Singapore, overall salary increases are projected to be 3.8% in 2019.
At the other end of the spectrum, the lowest expected salary growth is in Australia at 2.6%, New Zealand at 2.5%, and Japan at 2%.
The figures and forecasts are based on the Total Remuneration Surveys – Mercer’s flagship annual compensation and benefits benchmarking study, with participation from over 850 companies in Singapore across 14 industries this year.
Country data: Singapore and Malaysia
Overall salary increases in Singapore are projected to be 3.8% in 2019. Most industries are expected to see salary increases, with the exception of real estate, banking and lifestyle retail sectors.
The highest base pay and total cash increases in 2019 are expected to be for executive roles in life sciences and technology industries.
In terms of types of roles most likely to fetch increases, legal, finance and R&D functions emerged as the top three. Positive signals of revival in the semiconductor and biotechnology sectors imply that specialist engineering and sales talent will be in demand.
Bucking the trend of muted growth in the rest of the banking and financial services industry, the insurance industry is projected to see healthy growth.
Trends in pay parity
A closer look at pay parity (in terms of annual total cash) reveals that there are now several ‘tiers’ of countries across the region.
For example, in Australia, Japan and Korea, starting salaries begin at USD 30,000 per annum (p.a.), and rise steeply as employees reach senior levels, often at USD250–350k. Starting salaries are much lower (often just US$5k) in low-cost manufacturing bases but similarly increases significantly at top management levels.
In some countries – China, most notably – the highest-ranking executives out-earn their peers in the US and UK, although it is important to note that this picture changes once long-term incentives (LTIs) and European social security benefits are factored in.
More than a quarter (26%) of organisations in Asia reported a retention bonus provision for employees with specific digital skills.
Hiring outlook for 2019
Siddharth Mehta, Mercer’s Singapore career business leader said: “Despite some variations across the Asia Pacific, the overall hiring outlook is positive, with 66% of companies looking to maintain headcount in order to seize diversification and growth opportunities in the face of ongoing disruption.”
Talent scarcity plays a major role in shaping remuneration trends. Close to half (48%) of companies in Asia report having difficulty filling-in vacant positions, compared with the 38% of companies globally that are struggling to find the right talent to fuel their business expansion.
Subsequently, a significant premium is being paid for employees in specialist sales and engineering roles, in addition to local language expertise.
Puneet Swani, partner and career business leader for the International region at Mercer commented on Asia’s sustained demand for skilled talent, specifically for digital skills.
“Companies are offering generous incentives and retention bonuses. We also find companies deleveraging pay in the wake of increased regulatory scrutiny of discretionary bonuses, reducing year-end pay-outs and increasing base pay in order to contain excessive risk-taking,” he said.
Photo / StockUnlimited