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The pay gap for skilled labour continues to exist across Asia Pacific (APAC), with growing pay disparities between middle management and C-suite positions in 13 of the region’s developed and developing markets.
A report by Towers Watsons recently revealed Australia has the highest entry-level pay, where starting salaries could range between eight to 11 times those in China, the Philippines and Indonesia, and up to 15 times that in Vietnam.
Australia was also found to offer larger remuneration packages than in Japan, Singapore and Hong Kong, although the gap narrows past middle management levels.
However, Singapore fared well in terms of C-suite compensation, where salary levels at senior management levels surpassed those in Japan and Hong Kong. In fact, senior executive salaries in Singapore were 14% higher than in Hong Kong, and 34% higher at top management levels.
“Growth in private banking in Singapore and its development – or regeneration – as a regional hub for international companies has drawn a lot of high-level talent to the city and that’s reflected in the C-suite compensation,” Sambhav Rakyan, data services practice leader for APAC at Towers Watson, said.
“That said, we’re looking at pre-tax remuneration in this survey – and, when that’s taken into account, Hong Kong’s attractive tax rates do go some way towards offsetting the differential.”
In Hong Kong, the highest marginal tax rate on personal income is 15%, compared to Singapore’s 20%.
Another highlight of the report was the labour cost between China and India, the region’s two biggest labour markets. At senior level, executive pay in China is up to twice that in India (S$120,000).
The report suggested the drop in Indian labour cost could be a direct result of the rupee weakening against the US dollar, which has fallen 12% on the year, compared to the renminbi’s 3% growth.
However, Clare Muhiudeen, managing director of talent and rewards for APAC at Towers Watson, said she expects the pay gap between China and India to narrow, thanks to higher inflation rates in India.
“We expect average salary increases in India to be higher than China’s 8.5%. That said, India clearly has more affordable labour than China and that’s the way it’ll be for the foreseeable future,” she added.