Asia salaries seen up 7 pc in 2014; India projection at 11 pc

NEW DELHI, INDIA: Salaries across Asia Pacific are set to rise an average 7 per cent in 2014. Taking inflation into account, China and Vietnam at 4.9 per cent lead the way, while Japan at 0.5 per cent and India at 2 per cent are among countries offering the smallest raises, according to a survey conducted by professional services company Towers Watson.

Elsewhere in the region, Hong Kong and Singapore salaries are set to rise 4.5 per cent, Australia 4 per cent, Philippines 6.9 per cent and Indonesia 9 per cent, discounting inflation.

Sambhav Rakyan, Global Data Services practice leader, Asia Pacific at Towers Watson, said, "Overall, the Asia Pacific data for 2013 and 2014 looks similar, so companies should be budgeting for salary increases much the same as last year. However, at the end of the day, it depends on the affordability for the company."

"If the company is growing at a fast rate and revenue exceeds the cost by a huge margin, it is easier to be aggressive on salary budgets than low growth companies," he added.

The findings support the view that companies in Asia Pacific, including India, are finding it harder to both find and retain suitably skilled staff. One outcome of this is that more than 80 per cent of the companies surveyed in India say a larger portion of their salary budget increase allocation would go to high performers in 2014. The retail industry in India particularly stands out with all respondents planning along these lines.

Reflecting the continued challenges faced by the automotive industry in India, the survey finds that 10 per cent of the companies anticipate a pay freeze in 2014 compared to the overall average of 1 per cent. Furthermore, 11 per cent plan to allocate their entire salary budget increase to high performers, perhaps in a bid to retain top talent.

The FMCG sector plans to adopt a more uniform approach with 56 per cent saying a larger portion of their salary budget increase allocation would go to high performers and 44 per cent saying all employees would get the same increase.

Subeer Bakshi, director - Talent & Rewards, Towers Watson India said "Our research clearly indicates that both employers and employees in India rank base pay among the top two retention drivers. Indian companies have traditionally offered high salary increases compared to the rest of the region, but face a paradox today."

"They continue to offer double digit salary increases as they deal with the challenge of attracting and retaining critical talent, but high levels of inflation end up eroding much of this hike. Part of the solution lies in the articulation and execution of a strategically designed employee value proposition (EVP) - the give and get between employer and employee. Savvy employers will want to tackle the hard work of getting this right, because the benefits are demonstrable, significant and sustainable," added Bakshi.