Salaries Across Asia Pacific to Rise 6% in 2011, Predicts Survey

Employees in the Asia Pacific region can expect salary increases of 6% in 2011, up from this years 5.2% average. This is more than 50% higher than the pay increases expected in Europe where they are forecast to rise 3.5% on average, according to the latest Salary Trends Survey by ECA International.


ECA's Salary Trends Survey, which is conducted annually, monitors actual salary increases for 2010 and predicted salary increases for 2011 in over 50 countries.


“While salary increases will rise again next year, the pace will slow down from that witnessed between 2009 and 2010 when salary increases within the region almost doubled,” says Lee Quane, Regional Director for ECA International, Asia. “Nevertheless wage increases are continuing to head towards the highs of 2008 when the regional average stood at 6.9%.”


The largest increments in the region will continue to be experienced in Vietnam, according to the survey. Workers there can expect their salaries to rise by 11.8% in 2011 while those in India and Indonesia will receive 11% and 9.4% increases respectively. Chinese employees can look forward to seeing their salary increases rise from 6.5% to 7.5% at the next pay review.


In Hong Kong, employees can expect salary increases of 3.5% in 2011, up from this year’s 3% increase, but inflation will overshadow the impact of this in real terms, says the study. "With 3% inflation forecast, increases will amount to just 0.5% next year in real terms," says Quane. "This is significantly lower than the anticipated regional real wage average of 2.4% and below the 2% real wage increases experienced by Hong Kong workers in the boom days of 2007."


Results from the survey indicate that, like their counterparts in Hong Kong, employees in Singapore should be prepared for salary increases lower than the regional average. Companies in Singapore forecast 4% increases in 2011, compared with this year’s 3.1% pay increases. Likewise, companies in Taiwan are forecasting salary increases of 3.5% in 2011, up on this year’s 2.8% figure.


“Salary increases in the region continue to be largest within developing Asia,” explains Quane. “This is partly to keep up with inflation and partly due to the demands of higher economic growth prompting widespread skills shortages in these locations.”


With salary increase predictions of 2.5%, employees in Japan will again receive the lowest increases within the region in 2011. Along with Hong Kong and Taiwan, companies in New Zealand are forecasting 3.5% rises while survey results show that companies in Australia as well as Singapore are predicting 4% salary increases.


Despite predictions that their salaries will see the largest increases in the region, Vietnamese workers fare less well once inflation is taken into account. With 8% inflation forecast there next year, real wage increases (the difference between actual salary increases and inflation) will be a considerably lower 3.8%.


However, Asian workers are set to receive the highest real wage increases in the survey on average. Employees in China will receive the largest real wage increases, not only within the region, but globally. They will receive real wage increments of 4.8%. Workers in India and Indonesia will receive 4.3% and 3.9% in real terms respectively.


Despite having the lowest actual salary increases in the region, deflation in Japan means that workers are forecast to receive 2.8% increases in real terms next year.


As last year’s forecasts suggested, the number of companies freezing salaries fell dramatically in 2010. Globally, approximately 13% of companies imposed salary freezes on average this year compared with over a third in 2009. This trend is set to continue in 2011 with just over 4% of companies imposing freezes globally.


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