Nikkei Asia reports, a number of recent studies indicate that, in the context of continued inflation and the labor crisis, workers in Asia are likely to receive more pay increases in 2023, including in Vietnam.
From India to Vietnam, to retain talent, employers must raise wages. Not only that, after the cost of living has risen sharply in Asia this year, the increase in wages is seen as a response to inflation projections in 2023, while giving hope for real income growth for workers in this area.
According to a study by Aon (US) on wages and unemployment rates in Southeast Asia, by 2023 the average wage growth budget across all sectors is forecast at 6.8% for Indonesia, 5.1% for Malaysia, 6% for the Philippines, 4, 7% for Singapore, 5.1% for Thailand and 7.9% for Vietnam.
Vietnam’s wage increase budget in 2023 is expected to be higher than that of other countries in the region. Source: Nikkei Asia
The study highlights that while inflation plays an important role in driving wage changes in ASEAN, the shortage of quality human resources has also influenced companies’ decisions to raise wages.
“Companies need to determine how to increase wages in 2023 given the competitive nature of their current salaries,” said Rahul Chawla, head of Human Resource Solutions, South East Asia, Aon. While it is important for companies to set and adjust pay for each employee based on the nature of the job, companies need to act quickly when reviewing their pay principles.”
Not just Aon, the results of the salary survey by consulting firm Mercer released last month also show signs of wage growth in the Asia-Pacific region in the coming year. In concrete terms, companies predict that wages will increase by an average of 4.8% in 2023.
However, Mercer’s research also reveals differences between countries. Accordingly, India has the highest expected wage increase for next year at 9.1%, while Japan has the lowest expected wage increase at 2.2%. China alone is the only market expected to fall slightly, from 5.4% in 2022 to 5.38% in 2023.
The survey results also show that in most cases, expected wage growth in the region will exceed expected inflation in 2023. For example, inflation in 2023 is forecast at 5.1% in India, 1.4% in Japan and 1.4% in Japan. China at 2.2%.
While some employees are concerned about rising costs, some may be looking for more. According to the Robert Walters Recruiting Company Global Salary Survey, “job-hopping” employees typically expect a 15% to 20% pay raise, and up to 40% of them are tech savvy.
In Singapore, the report shows that 80% of workers are likely to ask for a raise. With more than 78% of employees surveyed willing to change jobs next year if their salary increase is below inflation, 71% expect employers to consider rising cost of living when assessing salary increases or bonuses over the next 12 months .
However, wages are not the only problem.
“For many candidates, money is no longer the only factor in making work-related decisions. We have noticed that employees are forced to look for other opportunities when they feel exhausted or bored because they are not gaining new knowledge and experience,” said Monty Sujanani, Country Manager of Robert Walters Singapore.