In 2024, salaries in South-East Asia are expected to grow, despite worries about an economic recession.
With a predicted 6.5% rise in median income, Indonesia led the way, followed by the Philippines at 5.5%, Thailand at 4.9%, and Vietnam at 8%, according to the Aon 2023 income rise and Turnover Report. However, stagnating growth is what Singapore and Malaysia anticipate, at 4% and 5%, respectively.
Attrition rates are still in the double digits even if they are lower than in 2022. Vietnam continued to record the lowest at 13.8%, while the Philippines reported the highest at 17.5%. According to Aon’s data, hiring plans for 2024 in South-East Asia are seen with cautious optimism by firms, with 40% expecting to keep recruiting at present levels and another 40% expecting to impose employment limitations.
The average new hire premium dropped from 14.7% to 23.6% in 2022 to 5.6% to 13.3%, which is indicative of organisations’ attempts to improve cost effectiveness and simplify budgets. Alina Cheng, Head of Data Solutions, Talent Solutions, South-East Asia, Aon, underlined the need of resolving pay compression concerns. “Organisations can subsequently decrease the need for new hire premiums while enhancing their employee value proposition by focusing on and nurturing talent from within,” the speaker stated.
Salary rises in 2024 may differ depending on the industry. With a 6.1% growth, the retail industry is leading, followed by the technology sector at 6%. Manufacturing, financial services, life sciences and medical devices, and these sectors all had rises of 5.9%, 5.8%, and 4.8%, in that order. Inflationary pressures are taken into account when evaluating wage increases for pay policy in 67% of the organisations in the region.
In difficult circumstances, companies can’t afford to only raise pay since they also need to control personnel expenses and profitability, among other things. Therefore, having a comprehensive overall incentives plan built on data and analytics will guarantee that organisations will draw in and hold onto the best personnel while also fostering the development of a resilient workforce, Cheng said.
