Asian salary growth slows: Survey

Asian salary growth slows: Survey

Agence France-Presse, Hong Kong

Asia Pacific companies have reacted to the global economic downturn this year by offering lower salary increases or freezing pay, a survey revealed Thursday.

The Indian information technology (IT) sector recorded the strongest wage increase of 16.4 percent this year, the survey conducted by consulting firm Hewitt Associates showed.

India was followed by the Philippines, China, Korea and Indonesia which offered average salary hikes of between 6.4 percent to almost 10 percent.

The most widespread wage freezes this year were experienced in Hong Kong where 45 percent of companies held pay steady, followed by Indonesia with 33 percent.

China and Thailand had the lowest number of firms imposing salary freezes with seven percent and eight percent respectively.

"The smaller salary increases and the extent of total pay freezes recorded across the region do not come as a big surprise considering the continuing struggle of the global economies affecting most businesses in Asia Pacific," said Mick Bennett, Asia Pacific managing director for Hewitt Associates.

"The relatively higher average salary increases witnessed in China, India and Korea reflect the rapid development of these economies and continued foreign investment, despite the global downturn."

Companies from the developed economies of Hong Kong and Singapore followed the trend established over the past two years, by offering the lowest average salary increases ranging between 0.6-1.8 percent and 2.1-2.9 percent respectively.

Most companies surveyed projected a slight rise in salary increases next year, except South Korea which expected salaries to remain flat overall.

Indonesian employers were the most optimistic with salaries tipped to soar almost 12-14 percent next year, compared with gains of 6.4-9.7 percent in 2002.

Around one in four of all companies in the region expressed concerns about attracting and retaining suitable employees.

Companies in mainland China were the most affected with some 52 percent of respondents concerned about their ability to attract quality employees to fill sales, marketing and engineering positions.

Other countries deeply affected by the issues of attraction and retention were India, Korea and Thailand.

"There is still a talent crunch in countries with developing economies such as China, India and Korea," said Bennett.

Hewitt surveyed 1,007 foreign, locally-owned and joint-venture firms between July and September in 13 countries.