While the estimated salary hike in 2018 is 3.9% for both Hong Kong and Singapore, the two markets will see lower hiring intentions compared with other markets in Asia Pacific, according to Mercer’s Global Compensation Planning Report and Total Remuneration Survey.
The hike in the two markets is higher than those in Australia (3%) and Zealand (3%), but is lower than those estimated for India (9.8%) and Vietnam (9.1% ), Indonesia (8.1%), The Philippines (6.3%), Malaysia (5.5%), and Thailand (5%).
In addition, real wage growth has also been steadily rising in the region, often reaching double digits in emerging markets. And, while forecasts vary quite widely across specific industries, the strongest push is likely to come from the chemical and life sciences industries, said Mercer.
Hiring outlook positive in the region
Hiring in India, Vietnam and the Philippines is happening at a greater pace compared with other countries in the region, whereas hiring intentions are lower in Singapore, Malaysia and Hong Kong, Mercer observed.
The overall hiring outlook is positive, however, with five out of 10 companies looking to maintain headcount, including replacements for turnover.
In Asia, 48% of companies report having difficulty filling-in vacant positions, as compared with 38% of the companies globally struggling to find the right talent to fuel their business expansion.
Hong Kong: Life sciences to see highest base salary hike
The Hi-tech industry in Hong Kong is slated to see the highest base salary increases
Life sciences (4.5%), chemicals (4.3%), and consumer goods (4.3%) are the industries with highest salary increase in Hong Kong, while the biggest functional premium is for the sales and corporate affairs functions, said Mercer.
In addition, Hong Kong employees—more than 53%—want their employers to focus more on their health and wellness, implying the need for a stronger focus on differentiation through benefits.
“Hiring, retaining and engaging skilled talent in Hong Kong will continue to be a top priority for companies looking to leverage the strong macroeconomic outlook for 2018,” said Robert Li, Career Business Leader at Mercer Hong Kong. “We continue to see a high level of pay increases used as a retention tool for high-performing talent. This has become even more critical, especially with the cross-industry movement of talent in specialist roles such as sales and engineering. We also find companies deleveraging pay in the wake of increased regulatory scrutiny of bonus payouts, thereby reducing year-end bonuses and increasing base pay instead to reduce excessive risk-taking and discretion.”
Singapore: Five sectors expected to see lower salary hike
Most of the industries in Singapore are expected to have a higher salary increase in 2018, with the exception of the life insurance, Internet, real estate, banking, and logistics sectors. A rise in inflation could depress wage increases though, with most employers not planning to increase HR budgets in 2018, Mercer noted.
The life sciences (4.1%) industry projected to have the highest salary increase in Singapore, Mercer said, adding that positive signals of revival from the semiconductor and biotechnology sector imply that specialist engineering and sales talent will be in demand.
“With the new industry skills frameworks being introduced by SkillsFuture, companies are looking to both reskill existing talent pools as well as also hire for different skillsets even when hiring for replacement roles, “ said Kulapalee Tobing, Mercer’s Singapore Career Products Leader. “ The current focus on restructuring the economy and raising productivity by the government has meant a sharp focus on continuous learning.
SkillsFuture is a national movement to provide Singaporeans with the opportunities to develop their fullest potential throughout life, regardless of their starting points, according to the movement's website.
“At the same time, the Singapore workforce is one of the most disengaged at work according to Mercer-Sirota research. This would mean an increased focus by companies on creating differentiation through innovative health and other benefits,” Tobing noted.