Asian and South American countries are likely to see the most growth in wages in 2013 as those in the Western world are hit by the economic slowdown. Latin America will experience the highest overall rise in salaries next year with an average of 9%. Top of the league are Venezuelan workers who are set to see wages jump by a colossal 29%, largely driven by high inflation, according to research from global management consultancy the Hay Group.
There will also be significant growth in other markets including Vietnam, with a projected jump of 12.8%, Indonesia at 10.6%, India at 10.5%, the Philippines at 8% and Malaysia at 6.2 %. While in China, workers can expect wage hikes of 9.5 % as the intensifying ‘war for talent’ continues despite slowing economic growth. Thailand is expected to see wage growth of 6%, Korea 5.3%, Australia and Singapore both 4% and New Zealand 3%.
The report points out that pay rises in the second generation of high growth Asian economies are outstripping those in the region’s more developed countries – for example, in Japan, wages will increase by just 2% next year.
Developed Western economies will experience the smallest increases in 2013, as GDP growth remains broadly flat. While across North America, pay is expected to rise by 2.9%, the lowest of any global region and in Europe, crisis weary companies in Greece and Ireland will not raise pay next year at all. In other European countries the outlook is subdued with increases of just 3% expected in Germany and the UK and just 2.6% in France.
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‘It’s no secret that employees in developed markets face a tough year ahead with small wage increases, however, despite the weak outlook there is an upside for Australian workers as it is predicted they will receive higher pay rises than most of their Western counterparts,’ said Steve Paola, senior consultant at the Hay Group. He also said that employers in Australia, for example, may struggle to keep talented workers who could be attracted to emigrate for better wages.
‘With strong economic growth in Asia translating into a need for talent and rocketing wage hikes, local organisations may struggle to keep their most talented employees in the country as they are increasingly being enticed to work for companies located in buoyant Asian markets,’ he explained, adding, ‘Businesses need to ensure they have reward strategies in place that deliver strong incentives for their current and future employees enabling them to retain high performing staff despite modest pay increase forecasts,’ he added.