5% salary hike forecast for 2020
Korn Ferry survey puts Thai pay increases slightly below average for Asia
published : 9 Dec 2019 at 04:31
newspaper section: Business
Salary growth of 5% is forecast in Thailand in 2020, slightly below the 5.3% average for all of Asia, according to a study by the organisational consulting firm Korn Ferry. After accounting for an inflation rate of 1.3%, real wage growth in Thailand is forecast at 3.7%.
Thanwa Chulajata, country manager for Korn Ferry Digital in Thailand
The oil & gas sector is seen as the leader in salary increases in Thailand at 6.2% while the chemical sector has the highest variable bonus at 4 months. The variable bonus payout was forecast to be 2.5 months on average across industries.
Total employee turnover in Thailand this year is estimated at 10.8% and decreased slightly from last year (12.6%). The retail sector had the highest total employee turnover at 36.3%.
The survey was based on Korn Ferry's pay database, which contains data for more than 20 million job holders in 25,000 organisations across more than 130 countries.
It shows predicted salary increases, as forecast by global HR leaders, for 2020 and compares them to predictions made at this time last year for 2019. It also compares them to 2020 inflation forecasts from the Economist Intelligence Unit.
Across Southeast Asia, Indonesia is forecast to have the highest real-wage growth at 5.1% next year, after accounting for an inflation rate of 3.0%. Malaysia is forecast to have a real-wage growth at 3.5%, after accounting for an inflation rate of 1.5%.
Although salaries in Singapore are forecast to grow by only 4.0%, the city-state's relatively low inflation rate of 0.4% translates into a 3.6% increase in real-wage growth in 2020.
Around the world, salaries are predicted to grow at a rate of 4.9% in 2020. With a global inflation rate prediction of approximately 2.8%, real-wage salary increases are predicted at 2.1%. In 2019, real salary increases across the globe were only 1.0%, with a salary growth rate at 5.1% and inflation at 4.1%.
Thanwa Chulajata, country manager for Korn Ferry Digital in Thailand, says rapid changes in the world of work are affecting the way business organisations manage their people and determine compensation.
"Digital disruption is leading to changes in the way organisations work, the operating model, business and organisational structure," he said.
"These changes also affect how human capital is being managed from recruitment and performance management to talent development and retention. HR capital is a key factor to drive transformation within the organisation to ensure sustainability, competitiveness and profitability.
"Besides recruiting new talent, organisations should also develop existing talent by reskilling and upskilling these talents for various key competencies, especially to multitask. New business models often need fewer employees while still driving productivity.
"With multi-generational workers and emerging digital talent within the same workforce, a single HR practice or system will no longer work for all," said Mr Thanwa. "Segmentation will be crucial when managing rewards and benefits.
"Unlike baby boomers, digital talents want more challenging jobs in a highly competitive market and more flexibility in the work environment. They are more agile in learning and are also focusing more on achieving higher salaries, faster career growth and better life status at a faster rate.
"A total rewards strategy should no longer focus mostly on traditional factors, but on what talent wants through exhaustive data analysis."