Salaries to see stable growth
published : 8 Nov 2019 at 08:31
newspaper section: Business
Salaries in Thailand are estimated to grow at a stable rate of 5% this year, according to a report by Mercer Thailand.
Mercer announced the results of its annual "Thailand Total Remuneration Survey", a study that makes hiring and pay increase predictions for 2020.
The survey of 607 companies across various industries found the automotive industry has the highest projected salary increase at 5.5%, while the high tech industry has the highest involuntary turnover rate at 7%.
The chemical industry is forecast to grow its salaries by 5.2%.
Thailand has a low rate of inflation projected at 1.1% (1.0% in 2019).
The forecast variable bonus trend across all industries that plan to pay for 2019 performance is 2.3 times the monthly base salary.
The automotive industry is predicted to pay the highest variable bonus at 3.6 times the monthly base salary when compared with other industries, followed by the life insurance and high tech industries, which plan to pay a variable bonus of 2.5 times the monthly base salary.
Across industries, voluntary turnover rates were on the rise last year with the turnover rate increasing to 12.8% in 2018 (as compared with 12.5% the previous year).
However, according to the latest data from Mercer's Asia Market Pulse survey, in the first quarter of 2019 the voluntary attrition rate seems to have stabilised and remained the same as the first quarter of 2018 at 4%.
The top reasons cited for employees leaving their organisation in Asia varies by age group and gender.
However, in general the top three reasons for employees choosing to quit their organisation are competitive pay, manager interaction, and a clear career path and job security.
The high-tech industry in Thailand has the highest involuntary turnover rate at 7% and this can be attributed to the increasing role of technology and the need for organisations to adapt to automation and digitalisation.
The hiring trend in Thailand in 2020 is expected to drop slightly, with 29% of organisations planning to add new hires compared to 31% in 2019.
"Digital transformation forms a key part of Thailand's national agenda with the Thailand 4.0 master plan and digital economy plans [2018-2021]," said Juckchai Boonyawat, chief executive of Mercer Thailand.
"In order to attract, retain and grow, companies need to adapt to the new digital reality and an evolving workforce.
"Faced with changes including digital disruption, an ageing population and so-called gig or contract workers, companies in Thailand need more than ever to revisit their total rewards and compensation, and personalise and incentivise the experience for each of their diverse employees."
A number of companies have already implemented flexible benefits programmes and pay-for-performance incentive models to meet these challenges, Mr Juckchai said.