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Employees in Singapore and Hong Kong should expect a salary increase of 3.8% in 2022, while those in Malaysia 4.7% and Thailand 4.8%.
Employers in the Asia-Pacific (APAC) region are forecasting an overall average salary increase of 5.08% this year for managers, executives, professional employees and support staff, according to the latest report from Willis Towers Watson. Salary budget planning survey report.
This is after registering an actual average salary increase of 4.62% in 2021.
The report reveals that two in five employers (42%) are planning higher salary budgets this year. In fact, a quarter of respondents (25%) have changed and increased their projected salary increase budgets for 2022 from initial projections made in July last year.
In terms of market breakdown, the planned salary increase for 2022 is as follows:
- Singapore – 3.8%, down from 3.4% (2021)
- Malaysia – 4.7%, down from 4.1% (2021)
- Hong Kong – 3.8%, down from 3.3% (2021)
- Thailand – 4.8%, from 4.2% (2021)
- Indonesia – 6.6%, from 5.8% (2021)
- India – 9.2%, compared to 8.2% (2021)
- Vietnam – 7.8%, compared to 7.2% (2021)
As for employees in China, they can expect a salary increase of 6%, a difference of 0.4% compared to 2021. While those in Japan can expect 2.6%, and those in the Philippines at 5.4%.
[refer to the graph on top for the full table on projections and actuals]
[ICYMI: Singapore salary insights 2022 for 5 sectors: ICT, banking & finance, manufacturing, and more]
Why the salary increase?
According to the report, a third (30%) of employers cited the “tight labor market” as a reason to increase their salary budgets compared to previous projections. Meanwhile, more than one in five employers (23%) believed a pay rise was possible because they “expected better financial results,” and nearly one in five (19%) attributed the increase concerns about its employees regarding cost management, such as inflation and rising cost of supplies.
“There is little doubt that costs, wages and prices will increase this year. Our research shows that employers are influenced by different factors when adjusting their wage budget projections this year. However, with the index APAC Consumer Price Index (CPI) forecast to reach 3% or even higher in some markets, employers will most likely consider the cost of living for salary increases,” Edward Hsu, Business Leader, Rewards Data and Software, Asia Pacific, WTW, abstract.
Beyond that, the projected increase in wages is due to a labor shortage in some sectors, which increases the demand for skilled workers.
This trend is “triggering a talent war” as employers compete to attract and retain employees who have more choices (in their career prospects) today than in recent years. Total attrition rates in several markets such as Australia, Hong Kong, Singapore, South Korea and Thailand have actually “significantly increased”, with most now exceeding pre-pandemic levels.
What is the expected salary increase by sector?
When it comes to industry breakdown, the largest salary increase expected for 2022 is in high tech at 5.39%. This is followed by pharmaceutical and healthcare services at 5.12%, and consumer and retail products at 5.05%. The full breakdown is shown below.
“The labor market is anticipating new entrants not only among the unemployed, but also among the talent pool currently employed, prompting employers to take a hard look at their retention strategies,” Hsu explained.
“Whether an organization is experiencing the phenomenon of Big Resignations or Big Hires, having relevant and competitive compensation and benefits remains essential to attract and retain talent. There is a great redefinition of work priorities, rewards and ongoing careers, and this puts significant pressure on compensation packages for many employers.
Hsu, however, warned that raising employee salaries is not the ultimate solution. To “win the war for talent”, employers must look at their total compensation strategy from a creative and holistic perspective, and design a forward-looking rewards program designed for “future success” to support the business. .
[ALSO READ: The workforce in 2022: 15 trends that will shape hiring, learning, working, and more]
Image/WTW
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