Salary increases rebound for first time in four years
Consumer products industry leads table while insurance lags in Thailand, says Willis Towers Watson survey
published : 10 Dec 2018 at 08:03
newspaper section: Business
Salary increases in Asia-Pacific recorded a modest rebound this year for the first time since 2014, according to Willis Towers Watson, a global risk management, brokerage and advisory company.
The average salary increase of 5.7% across 17 markets was one-tenth of a percentage point higher than in 2017, according to the firm's latest Salary Budget Planning Survey Report. The increase in Thailand was 5.2%.
The slight upward trend is expected to continue through 2019 given the region's realistic outlook for business results this year. Sixty percent of surveyed organisations expect their company performance in 2018 to be in line with the previous year's results, the survey showed. Results were based on 3,769 sets of responses from businesses in 21 countries.
On average, 16.8% of the salary increase budget is being allocated to top performers, which represent 12.8% of employees across the region. This implies that for each $1 allocated to an average or below-average performer, $1.44 is allocated to a top performer.
The average annual incentive for 2018 was 1.5 months' base salary. Incentives averaged 1.7 months in Thailand and Vietnam, and were slightly higher in China, Hong Kong, Malaysia and Singapore.
Early projections for 2019 are for salary increases of 0.1 to 0.5 percentage points higher than in 2018. Growth is foreseen in Thailand, China, Indonesia, Japan, Malaysia and South Korea. No growth is seen in Australia, Hong Kong, India, New Zealand, the Philippines, Singapore, Taiwan and Vietnam.
Salaries in Thailand are projected to increase by 5.3% in 2019, versus a regional average of 5.9%.
The strong growth in the consumer products industry in Thailand is helping to keep the sector's salary increases ahead of those in other sectors, which closely aligns with the regional trend, according to Willis Towers Watson. On average, consumer products firms offered increases 0.3 points higher than in general industries.
On the other end, salary increases in the insurance industry still lag in Thailand, coming in 0.4 points below the general industry trend.
The survey also reveals that 24% of companies in Thailand plan to hire more people in the next 12 months, especially those with technology skills. With post-millennials, also known as "digital natives", starting to play a greater role in Thailand's labour market, employers face new challenges to find ways to attract skilled digital native talent.
Engineering and information technology (IT) are the top two functions where digital skills are in demand locally. Fresh graduates can command a minimum monthly starting salary of 18,000 baht (for IT) or 19,000 baht (for engineering), compared with 15,000 baht for other positions.
"Base pay and incentives have always been fundamental talent attraction and retention levers," said Tony Kantapasara, talent and reward business leader at Willis Towers Watson Thailand, Myanmar and Cambodia. "However, our research and work with clients in Thailand provide evidence that organisations need to think beyond pay. The value of organisational culture, leadership and other non-monetary rewards such as career development and opportunities should not be underplayed.
"Organisations can better formulate their pay mix and reward strategies through insights into the needs of their different workforce segments and the value of their contribution to the overall success of the business.
"For example, baby boomers and post-millennials will certainly have different behavioural drivers and incentive preferences, and having a plan for these variations will drive a more successful talent attraction and retention strategy."
The Salary Budget Planning Survey can be ordered at https://bit.ly/2St9Qu4