A forecast issued by Korn Ferry reveals that, adjusted for inflation, real-wage salaries in Asia are forecast to increase 2.6 percent in 2019. This forecast is the highest globally and exceeds the expected global average real-wage salary growth of 1.0 percent. In Hong Kong, the real-wage salaries are forecast to increase 1.7 percent this year, similar to predictions in 2018.
“With inflation rising in most parts of the world, we’re seeing a cut in real-wage increases across the globe,” said Robert Li, Senior Client Partner, Korn Ferry. “Asia has managed to maintain similar salary increase forecast as last year, driven by the strong economic outlook in this region and projected subdued inflation.”
“In addition, the Greater Bay Area initiative has brought optimism and is expected to have a further positive impact on Hong Kong and China economies in the long run. This, in turn, will boost salary increase expectations. However, the actual percentage of salary increase will ultimately depend on how the global and China economies perform given the uncertainty due to rising trade tensions.”
In Asia, salaries are forecasted to increase by 5.6 percent, up from 5.4 percent last year. Inflation-adjusted real wage increases are expected to be the highest globally but down 0.2 percent from 2.8 percent last year.
China’s real-wage forecasted growth for 2019 weakened at 3.2 percent, down from 4.2 percent last year. Hong Kong maintained the same level of salary increase forecast as 2018 at 4 percent and 1.7 percent after adjusted for inflation. Singapore‘s forecast of salary increase at 4 percent, up from 0.7 percent last year, and real-wage growth at 3.0 percent, up from 2.3 percent last year.
Korn Ferry pay experts recommend taking a holistic approach when determining pay.
Li added: “While inflation indices are a solid benchmark for reviewing market trends in pay, we recommend that companies take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and local trading conditions. Compensation programs need to be regularly reviewed to make sure they align with changing business and market conditions.”