At the top of 2023, it continues to be common for trade unions to call on the federal government to boost minimum wages. A recent study by AON, a worldwide business consulting firm, shows that worker salaries in Southeast Asia will increase in 2024.
AON’s 2023 Southeast Asia Salary Growth and Turnover Report reveals projected salary growth in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam for 2024.
With a projected wage increase of 8.0% in 2024 in comparison with an actual wage increase of seven.5% in 2023, Vietnam tops the list. Next in line is Indonesia, which recorded growth of 6.5%, 0.5% greater than the previous yr.
The Philippines is anticipated to be in the highest third of the rankings with a growth of 5.5%, which is barely 0.3% higher than the actual growth in 2023.
Thailand forecast a growth rate of 0.2%, increasing from actual growth of 4.7% in 2023 to 4.9% in 2024. However, the forecasts for Malaysia and Singapore were similar for the opposite 4 countries . Malaysia’s growth would remain constant at 5%, while Singapore’s growth would remain at 4%.
The study further found that corporations within the study area display a moderate sense of cautious optimism regarding their recruitment practices. Of the 950 employers surveyed, 40% reported no change in worker numbers, while the remaining 40% reported hiring restrictions.
With average premiums for brand new hires starting from 5.6% to 13.3%, corporations have gotten increasingly cautious with their payroll spending. However, that is in stark contrast to 2022, which averaged between 14.7% and 23.6% amid an employment boom in Southeast Asia.
According to Alina Cheng, Southeast Asia director of information solutions for talent solutions at Aon, salary compression, or differences in worker pay no matter their level of experience and expertise, is an actual problem for employers.
“When new hires are paid higher than their senior counterparts, companies are likely to experience wage compression problems,” Cheng noted in a press release.
Cheng warned employers that wage compression could end in a pointy increase in worker attrition rates and a noticeable decline in worker morale inside the company.
“By prioritizing and nurturing talent from within, companies can then reduce the need for new hire bonuses while simultaneously increasing the value proposition for their organization’s employees,” Cheng added.
Source: Aon.com
