Asia Pacific, 4 June 2009 – Pay rises are down by half what they were nine months ago. Salary increase rates budgeted for 2009 across Asia Pacific have been cut by an average of 52 percent, according to a recent survey conducted by Watson Wyatt, a leading global consulting firm.
Many companies have chosen to freeze pay in 2009, particularly in locations where businesses are much more exposed to the slowdown in global trade – Hong Kong, Japan, Singapore, South Korea and Taiwan.
|
Locations
|
2009 Salary Increase Budget(%) |
GDP projections as of May 2009 Source: EIU |
||
|
July 2008 |
March 2009 (all employers) |
March 2009 (excluding employers with salary freeze) |
||
| China |
9.8 |
5.0 |
7.1 |
6.5% |
| Hong Kong |
5.0 |
1.9 |
2.8 |
-5.9% |
| India |
14.1 |
6.9 |
8.9 |
5.0% |
| Indonesia |
12.8 |
8.6 |
8.6 |
-1.4% |
| Japan |
3.9 |
1.0 |
1.9 |
-6.4% |
| Malaysia |
6.6 |
3.9 |
5.1 |
-3.0% |
| Philippines |
9.5 |
5.4 |
7.0 |
-1.9% |
| Singapore |
5.3 |
2.1 |
3.4 |
-8.8% |
| South Korea |
6.2 |
2.1 |
4.9 |
-10.1% |
| Taiwan |
4.2 |
1.6 |
3.0 |
-9.3% |
| Thailand |
7.0 |
5.2 |
5.4 |
-4.4% |
The budget for salary increases dropped sharply in India from 14.1 percent in July 2008 to 6.9 percent in March 2009. Similar significant reductions were seen in China, Indonesia and Philippines.
The decision to freeze salaries is most often made in global headquarters, as shown in the table below:
|
Decision to Freeze Salaries in 2009 |
|||||
|
Locations |
Number of Companies |
Number of Companies Freezing Salaries |
Global |
Regional |
Local |
| China |
240 |
47 |
17% |
6% |
77% |
| Hong Kong |
220 |
54 |
34% |
21% |
45% |
| India |
171 |
32 |
84% |
5% |
11% |
| Indonesia |
62 |
0 |
0% |
0% |
0% |
| Japan |
36 |
19 |
58% |
17% |
25% |
| Malaysia |
86 |
18 |
67% |
6% |
28% |
| Philippines |
178 |
39 |
100% |
|
|
| Singapore |
85 |
25 |
56% |
8% |
36% |
| South Korea |
50 |
23 |
91% |
9% |
|
| Taiwan |
389 |
173 |
49% |
8% |
43% |
| Thailand |
164 |
19 |
80% |
20% |
|
Russell Huntington, Asia Pacific Director of Watson Wyatt’s Human Capital Group, believes the sudden change in the salary scenario is not surprising. According to Russell, ”The labour market has changed considerably, reflecting the rapid deterioration of Asian economic growth. In this environment, the skill shortages which have plagued Asian employers over the past year have given way to an employers’ market. Companies now see no need to increase salaries aggressively. Indeed many take the opportunity to freeze salary costs. The drop in inflation rates has further eased pressures for salary increases.”
The Regional HR Pulse Survey was conducted from 1 February to 15 March 2009 in 11 Asia Pacific countries by Watson Wyatt Data Services. More than 1,600 organisations in various industries participated in the study.
The survey can be aquired at the cost of 800 USD, for more information please contact:
