Asia-Pacific employers are predicting an average of 6.2% salary increase in 2013, the same as this year, according to the latest Salary Trends Survey from ECA International. Overall this average is still higher than those forecast for Europe (3.3%) and North America (3%).
In 2013, Vietnam will lead Asia-Pacific in terms of highest salary increases, with companies expected to pay as much as 12%, third only to Venezuela and Argentina in the global ranking of top salary increase forecast rankings. After inflation is taken into account, the real salary increase in Vietnam will be 5.8%.
Hong Kong employers are predicting 4.5% salary increases in 2013. While this is the same as this year’s increments, a lower anticipated inflation rate of 3% in 2013 will mean higher increases in spending power next year.
"The predicted annual salary increase of 4.5%, coupled with an anticipated annual inflation rate of 3%, means that employees will enjoy better purchasing power next year with their take home pay than this year with its 0.7% ‘real’ wage increases," explains Lee Quane, Regional Director for ECA International Asia.
According to the ECA survey, employees in mainland China can expect to see salary increases of 8.5% on average. With inflation there predicted to be 3% as well, wage earners on the mainland can expect to buy even more with their money.
"There is an ongoing skills shortage in China as foreign and local companies continue to chase rapid expansion growth targets," said Quane. "While employees in China still receive lower salaries than their Hong Kong counterparts, this skills shortage has forced companies to increase wages to retain qualified staff, narrowing the gap between Hong Kong and China-based employees."
Wage increases in China are expected to vary according to maturity of the market. For instance, employees in Beijing and Shanghai will experience rises of about 8%, which will be slightly lower than their counterparts in other Tier 1 cities such as Guangzhou (9%) and Shenzhen (8.3%).
While pay increases in Singapore will be the same as Hong Kong (4.5%), inflation in the nation state is expected to be higher. Once this inflation is taken into account, Singapore workers will have the lowest rates of increase in real incomes in the region.
At 4%, Taiwanese employees are among those in the region predicted to have the lowest increases in 2013. With inflation anticipated to be 2% next year, employees there can expect real salary increases of 2% - higher than this year’s average real wage increase of 1.5%.
With a forecast salary increment of 2% for 2013, Japan is ranked at the bottom among the major markets in Asia Pacific. However, with deflation forecast for next year, salaries could increase by 2.2% in real terms.
Within the region, India is second only to Vietnam in terms of countries expected to see the highest salary increases next year with a double digit 11.2%, although the country's continued high inflation will erode it quickly.
The ongoing economic uncertainties in Europe and lingering worries about the US will impact wage increases globally.
In the vast majority of countries surveyed, salary increases predicted for next year are the same or lower than last year. It is anticipated that global salaries will go up by 5.5%, slightly lower than this year's 5.6%. If global inflation for 2013 is 3.7% (as forecast), real salary increases will be 1.9% on average – the same as this year.
Latin America will lead the world in terms of average salary increase in 2013. Employees there can expect increases of over 12% on average. Venezuela is forecast to see the highest pay increase as companies there predict increases of up to 28.1% for next year. However, the impact of this will be completely eroded by inflation which is forecast to reach 28.9% in 2013.
At 23.5%, Argentina is predicted to have the second highest average salary increase next year, but in real terms increases are likely to be much lower. While official inflation forecasts for Argentina next year stand at 9.7%, most independent analysts put inflation there at over 20%.
Salaries in Western Europe will go up by 2.8% – a little more than half of the 4.3% wage increase that employees in Eastern Europe can expect in 2013. Russian employees can expect the region’s largest increases, while Greek and Swiss employees, like their Japanese counterparts, are likely to see the lowest increases of all the countries surveyed.
Employees in both the United States and Canada can expect a 3% wage rise. In the Middle East, companies are forecasting salary increases of 5.2% on average in 2013.