Salaries Continue to Rise in Asia Pacific, Hewitt Annual Study Reports

The Average Overall salary Increase Budget in THAILAND Ranged from 6.2% to 6.4% in 2005. Few Companies Reported Salary Freeze this Year.

Asia's markets have demonstrated further growth in the last year, which has impacted salaries throughout the region. Many employers are reporting pay increases in 2005 and this trend looks likely to continue in 2006. In addition, fewer companies are implementing pay freezes, according to the annual

This year, India once again reported the highest average salary increase at 13.9%, and employees in the Indian IT-enabled industry received the highest increase across all five groups surveyed at 17.9%.

The Philippines recorded an impressive average overall salary increase of 8.2%, which was closely followed by China at 8.1%. As Thailand's economy continues to strengthen, employees enjoyed average salary increases of 6.3%.

Meanwhile, Malaysia's salary increase budget ranged from 5.4% to 6.1%, and Singapore saw increases ranging from 3.4% to 4.3%. Salaries also rose in Australia, Japan, Hong Kong and Taiwan.

"Thailand's economy has continued to grow over the last year, so it comes as no surprise that companies awarded employees with a healthy salary increase in 2005," said Indraneel Roy, head of Hewitt's Southeast Asia operation.

Further Increases Likely in 2006

Asia looks set for slow but steady economic growth in 2006, and many employers are demonstrating their faith in the region by projecting similar salary increases next year.

Fewer companies reported salary freezes for 2005 than 2004, and on the whole this improvement looks set to continue into 2006. In Korea, 5% of survey participants say they expect a salary freeze, compared to 4% in China and 3% in the Philippines. Meanwhile, 2.6% of employers in India and 2% in Hong Kong say they expect a salary freeze in 2006. None of the participating companies in Australia, Malaysia, Taiwan or Thailand expect salary freezes next year.

Variable Pay

Linking objectives to performance continues to be popular in Asia, and the ratio between variable and fixed pay will likely continue to increase in most countries except Singapore next year. Stock options remain the favored long-term incentive.

Fixed bonuses were also popular this year. Leading the way, 81% of participating companies in Taiwan offered fixed bonuses to employees in 2005, closely followed by 72% in Singapore, and 67% in Thailand.

Rising Attrition

Attrition is a growing concern in Asia, and rates rose in most markets. The highest employee turnover rate was recorded in the Philippines at 18.1%. Other markets with high turnover rates include Taiwan at 17.7%, China at 14.4%, Thailand at 13.4%, India at 13.1%, and Singapore at 13%. Attrition in Malaysia remained almost static at 12.5% up from 12.4%, while in Australia the rate dropped down to 13.3% from 15.1% in 2004.

Nishchae Suri, head of Hewitt's Talent and Organizational Analytics Consulting practice in Asia, commented, "Business and HR professionals across Asia continue to look for meaningful ways of managing rapid business growth amidst high attrition and challenges in attraction and retention of talent. Organizations will continue to strengthen their reward management practices and focus on pay for performance to retain talent and enhance overall productivity."

About Hewitt's Salary Increase Survey

Hewitt surveyed more than 1,500 foreign, locally-owned, and joint-venture companies this year, recording a 50% increase in participation over 2004 and making this the most comprehensive salary study in Asia Pacific to date. The survey covered 11 markets including Australia, China, Hong Kong, India, Japan,

To obtain a copy of the individual market reports, please email [email protected] .

About Hewitt Associates

With more than 60 years of experience, Hewitt Associates (NYSE: HEW) is the world's foremost provider of human resources outsourcing and consulting services. The firm consults with more than 2,300 companies and administers human resources, health care, payroll and retirement programs on behalf of more

Asia-Pacific Salary Increase Survey 2005-2006-Market Highlights

Thailand

-- Information was collected from 151 organizations.

-- 2% of survey respondents reported a salary freeze for 2005, and none

expect a salary freeze in 2006.

-- The average overall salary increase budget ranged from 6.2% to 6.4%

for the five employee groups surveyed for 2005, and from 6.3% to 6.4%

for 2006.

-- In 2005, professional/supervisor/technical and clerical/support

employees received the greatest average overall salary increase budget

at 6.4%; however all groups except managers are expected to receive

the same high level of average overall salary increase budget.

-- At 6.8%, senior/top management received the highest merit increase

budget in 2005, while manual employees received the lowest at 6.0%.

Next year, senior/top management are expected to receive the highest

merit increase budget at 6.5%, while manual employees will again

receive the lowest at 6.2%.

-- Senior/top management continue to have the highest percentage of

variable pay in their total cash compensation.

-- 54% of participating companies position their salary by comparing

total cash with the market, while 33% benchmark base salary with the

market.

-- It is expected that the ratio of variable to fixed pay will increase

in 2006 for all employee groups surveyed.

-- 67% of participating companies offered fixed bonuses to their

employees in 2005.

-- Stock options are the most popular form of long-term incentive among

participating companies.

-- The average turnover rate for participating companies was 13.4%.

Contact:

Indraneel Roy

Tel: +65-6872-7668

Email: [email protected]

Julia Smith,

Tel: +65-6872-7668

Email: [email protected]

Adele Wong

Tel: +60-3-2094-4088

Email: [email protected]

Melinda Earsdon

Tel: +852-2877-8600

Email: [email protected]

SOURCE Hewitt Associates

--Distributed by AsiaNet (www.asianetnews.net)--

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