Salaries expected to rise 6% in 2014

Salaries expected to rise 6% in 2014

Overall salaries in Thailand are projected to increase by 6% this year, compared with 5.4% in 2013, driven mainly by the higher cost of living, says global professional services company Towers Watson.

Pichpajee: Lack of high-quality talent

According to its latest survey, factors taken into account by companies for salary changes include economic stability, domestic supply of talent and the unemployment rate.

Conducted from January to March, the survey covered 93 companies from the automotive, financial services, insurance, manufacturing, electronics, high-technology and chemical industries.

Pichpajee Saichuae, managing director of Towers Watson Thailand, said salary changes have been stable at 5.6-6% in recent years.

"The economic slowdown has resulted in an increase in unemployment and directly affects salary changes," she said. "The political unrest caused organisations to delay employment in the first quarter and to review their marketing strategies."

In the survey, companies outlined strategies to cope with unexpected situations including political strife and natural disasters. The top three answers were reviewing market strategy, adjusting safety and working solutions, and allowing remote working. Only 7% chose to lay off staff.

The highest average entry-level salaries were for graduates in the engineering and research and development (R&D) sectors at 18,000 baht a month. Salaries in R&D will continue to grow the most as innovation and quality control are in high demand, particularly in export-oriented industries.

In terms of challenges, talent retention ranks top, with companies facing problems in retaining and attracting engineering and sales staff. The voluntary turnover rate in 2013 at 12.8% was the highest in the last four years.

"High-quality talent is limited. This has put a real challenge on companies’ talent management and affects their competitiveness," Ms Pichpajee said.

Last year, industries with the highest employee turnover rates were insurance (20%), financial services (18%) and electronics (17%). The average turnover rate was 9.35% from 2008 to 2011.

The survey also found that companies lack key talent strategies to prepare for the upcoming Asean Economic Community.

About 65% of respondents stressed the need for internal language training, while 58% emphasised the importance of leadership development, said Ms Pichpajee.

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