Tag: Thailand

Mercer recently performed research on the nominal wage growth occurring in Asia-Pacific countries, and found that that employees should be receiving slightly higher salary increases in 2017 compared to 2016.

The region is seen as an outlier due to the uncertainty of the global economy, and the fact that it is expected to perform above the global average. Inflation is low for most of the countries, so that helps to make the real wage growth relatively better.

Expected Percentages

Two countries that have the largest percentage of salary growth are Vietnam at 9.2 percent and India at 10.8 percent.

In addition, the financial regions of Singapore and Hong Kong are both expected to see about a 4 percent increase.

Countries that are among the lowest with increases between 2-3 percent, include Australia, New Zealand and Japan.

Employee Pay Levels And Rewards

Korea, Australia and Japan all have starting salaries that begin at about $30,000, and as employees move up the ladder, salaries rise steadily to the point where they could be making between $250,000 and $350,000.

In many of the countries in Asia (especially China), executives that are higher up in companies will earn better paychecks than their counterparts in the United Kingdom and the United States. However, this is only keeping salaries in mind, since things are different when the long-term incentives and social security benefits available in Europe are brought into the equation.

In Asia countries need to focus more on benefits and take a tailored approach. For instance, Korea and Japan both have an aging workforce with the average age of 45, and the benefits provided revolve around retirement and long-term incentives, whereas places with a younger workforce like in the Philippines, Indonesia and India focus on learning and development along with flexible benefits.

Turnover

Turnover seems to be an issue for companies in just about all of the Asia-Pacific countries as the research uncovered a double-digit turnover rate. The only two countries that aren’t facing these high rates of turnover are New Zealand and Japan.

As per a report by Willis Towers Watson, salaries in Asia Pacific are expected to increase by 5.9% in 2017.

For 2016 they had predicted an increase of 6.4%. However, the actual salary increase in Asia Pacific was 5.8%.

If the same pattern plays out in 2017, then Willis Towers Watson expects an actual increment that is a fair bit lower than 5.9%. That will make it the third consecutive year of declining budgets for salary increments.

If these numbers are adjusted for inflation, then the real salary increase in 2017 is projected to be 2.9% in Asia-Pacific, as compared to an actual increase of 3.5% in 2016.

Here is a breakdown of the numbers for several countries across Asia Pacific.

“We are seeing lower salary increase budgets across much of the region,” stated Sambhav Rakyan, Business Leader, Asia Pacific, at Willis Towers Watson.

The most recent Mastercard Index of Consumer Confidence (at the end of H1 2016) shows continued consumer confidence in the majority of Asia Pacific markets.

The Index numbers are compiled through a survey of over 8,500 respondents between the ages of 18 to 64. Those surveyed reside in the 17 Asia Pacific markets that are rated. They are asked to give a six-month outlook on important economic factors in the region.

Those factors include: the economic conditions, employment prospects, income prospects, the stock market, and quality of life. Index ratings are calculated on a scale of 0 (most pessimistic) to 100 (most optimistic), with a rating of 50 considered neutral.

Even with only minor increases in the overall score for Asia Pacific (0.05 points), the index numbers are only slightly below the optimistic level (60 points).

Of the 17 markets ranked, Taiwan’s gain of 16.3 points (to 45.3) raised their numbers from the lowest ranking in the region a year earlier. Taiwan’s numbers have been on a roller-coaster ride over recent years. The H1 2016 numbers were boosted because of increases in all major factors, with better expectations in stock market movements being the primary contributor.

The Philippines, also showed significantly better results. Recent elections in the country caused consumer confidence to improve almost 13 points, to 95.2. The Philippines’ score has not been higher since the inception of the survey in 1995.

Not all of the countries in the region scored as well. Confidence levels for seven of the 17 markets deteriorated since H2 2015. Indonesia, followed by Hong Kong, and Singapore, showed the largest drop in confidence. Sagging employment prospects were pointed to as the chief reason for the declines.

Eric Schneider, Asia Pacific- Senior Vice President, Mastercard Advisors said, “Overall consumer confidence in Asia Pacific has shown a marginal change with some economies facing headwinds, but the region’s emerging markets including China, India, Vietnam, Myanmar and the Philippines remain resilient with consumers expressing optimism about economic prospects over the next six months. Even as emerging Asia continues to drive the region’s growth, governments and businesses need to ensure stability and strong fundamentals in order to weather future external shocks.”

Highlights for Asia Pacific:

• Consumer confidence in APAC markets, with a slight increase of 0.05 percent, remains stable. Overall, the region’s rating rose to 59.72 since H2 2015. Markets ranked below the 50 line, eight of 17, remained the same.
• Since recording the most extreme deterioration of consumer confidence in H2 2015, Taiwan rebounded strongly with the largest improvement in H1 2016. Other markets with jumps of at least 5 points were the Philippines, India, and Malaysia.
• Extreme optimism was voiced by consumers in India (97.6), the Philippines (95.2), Vietnam (94.9), and Myanmar (99.8).
• Significant Index drops were reported in seven of 17 markets. Indonesia (-14.7), Hong Kong (-12.4), and Singapore (-10.7), had the largest declines. Decreases in Japan (-8.8), and the aforementioned Hong Kong and Singapore, moved their markets into pessimistic (less than 50 rating) from neutral.

Ratings by country

Australia and New Zealand - Both nations remain in neutral territory. A slight drop was reported for Australia (0.1). In New Zealand, a slight increase of 3.4 points was helped by improved outlook for employment and the stock Market.

China and Bangladesh - China’s confidence rating rose 1.4 points to 76. The numbers for Bangladesh showed a greater increase, up 4.3 points to 71.6.

Hong Kong – Hong Kong has seen significant decreases for two consecutive surveys. Hong Kong now sits at the bottom of the Index (32.1). All five components contributed to the decline, with the employment outlook (-20.9) being the biggest factor.

India – India remains in an extremely optimistic territory by posting a 7.5 point gain, which moved their score up to 97.6.

Indonesia – Indonesia lost significant ground, with the largest decrease of all 17 markets (-14.7). All five components declined, with employment (-26.9) and the economy (-22.5) showing the largest losses.

Japan - This once mighty economic power continues to fall further behind its neighbors. With a drop of 8.8 points, it moves deeper into pessimistic territory at 38.0 points. A 22 point loss in confidence in the stock market fueled the continuing slide.

Malaysia - All five components improved enough to halt the two-year slide for Malaysia. Their rating of 41.4 was raised 9.5 points by renewed faith in the stock market (12.4) and quality of life (11.4).

Myanmar and Vietnam - Both nations remained solidly in the extremely optimistic category with ratings of 94.9 and 99.8 respectively.

Singapore – Singapore fell 10.7 points, entering into the pessimistic category with a score of 33.6. Double-digit losses in quality of life (-14.5), regular income (-12), and employment (-11) signal problems for the nation.

South Korea - Remained firmly in pessimistic territory with a score of 34.2.

Thailand - Their two-year slide (since H1 2014) continues. A loss of 8.5 points drops them into neutral territory.