Salary increases in Thailand dipped below 5% for the first time in 10 years to 3.7% in 2020, while salaries next year are expected to rise 5%, according to a survey by Mercer Thailand.
The figures are based on the annual Thailand Total Remuneration Survey 2020 by Mercer Thailand, which surveyed 577 companies across multiple industries in Thailand between April and June this year.
Mercer is a human resources consulting firm based in the US.
Piratat Srisajalerdvaja, Mercer's career products leader for Thailand, said yesterday while only 22 companies out of 577 reported a salary freeze in 2020, the overall median salary increment for 2020 was adjusted to 3.7%, compared with the budgeted 4.8%.
Respondents are made up of foreign companies (75%) and Thai companies (25%). They cover small-sized companies (42%), medium-sized companies (47%), with the remainder large companies and giant firms.
"Salaries in Thailand are projected to increase in 2021, but it depends on companies and the spread of the Covid-19 and its effect on the economy," he said.
As a result, actual salary increases may be unlikely in the year ahead, said Mr Piratat.
The projected salary increment comes on the back of a weak economic outlook for Thailand, with GDP expected to contract by 7.8% in 2020. Even though the economy is predicted to rebound to 3.5% growth in 2021, the future remains clouded with uncertainty.
Mercer Thailand's chief executive Juckchai Boonyawat said bonuses for 2021 are expected to decrease because the pandemic has affected many businesses.
Some 28% of 577 companies expect their bonus payout for 2021 will be lower than the previous year's, while 39% said it is too early to tell. Only 5% of companies expect budgeted bonuses to increase in 2021.
In 2020, bonuses are expected to increase slightly to 2.3 months, compared with 2.2 months in 2019. The high-tech and chemical industries will see the highest increase.
Only 5% of companies surveyed did not provide any bonuses, said Mr Juckchai.
"Industry sectors that tend to pay bonuses for employees include automotive, chemical, high-technology, consumer product, life science and insurance sectors," he said.