Asian economies can again expect to see the highest salary increases globally. Although the headline figures paint a good story, a patchwork of regional economies sits behind them, so wage growth is not even.
In Asia, the topline forecast is for a 5.3 percent increase next year, with real-wage salaries expected to increase 3.1 percent (up from 2.6% last year) as inflation drops to 2.2 percent, according to Korn Ferry's 2020 Global Salary Forecasts.
Although the headline figures paint a good story, a patchwork of regional economies sits behind them. China’s real-wage growth for 2020 is expected to weaken to 2.9 percent, continuing the downward trend from 3.2 percent last year and 4.2 percent the year before.
Other mature economies, including Singapore, can expect to see increases, with Japan looking at a real-wage increase of 0.6 percent, up from 2019’s prediction of 0.1 percent. In Hong Kong, political uncertainty and a relatively high inflation rate of 2.6 percent have translated to a more modest real-wage growth forecast of 1.4 percent.
The Global Picture
Around the globe, salaries are predicted to grow at a rate of 4.9 percent in 2020. With a predicted global inflation rate of approximately 2.8 percent, the real-wage salary increase is expected to be 2.1 percent. So while the 2019 salary growth rate was a touch higher at 5.1 percent a higher global inflation figure of 4.1 percent meant 2019 real-wage salary increases across the globe were only 1.0 percent
This feels like good news for employees, but it also may reflect a shifting economic outlook that may mean slower growth in several key countries and an increased risk of higher unemployment, Korn Ferry's «report» added.
Singapore’s Businesses Need Focused Approach
The ongoing situation in Hong Kong and geopolitical uncertainty in other parts of Asia is creating specific talent challenges for Singaporean organizations. It is possible 2020 could see international and MNCs reconsidering Singapore as the main location for ASEAN and APAC head offices as they look for a stable home base.
This will keep the pressure on mid- and senior level wages in Singapore in contrast to the easing conditions in China as a result of the economic slowdown and US-China trade war. The second key challenge for Singapore’s businesses specifically affects engineering, IT and sales roles.
Almost 38% of respondents to Korn Ferry’s 2019-20 annual salary and benefits survey indicated they’re facing difficulties in filling these roles and the challenge is only likely to increase as the full brunt of talent crunch begins to take effect in 2020.
About the Study
The data was drawn from Korn Ferry’s pay database which contains data for more than 20 million job holders in 25,000 organizations across more than 130 countries.
It shows predicted salary increases, as forecasted by global HR leaders, for 2020 and compares them to predictions made at this time last year regarding 2019. It also compares them to 2020 inflation forecasts from the Economist Intelligence Unit.
