HONG KONG, Nov. 7--PRNewswire Asia/AsiaNet
Developing economies still battling to attract and retain talented people, while mature markets struggle to raise salaries
As global economies continued to suffer in 2002, companies around the Asia Pacific responded with more cautious salary increases than the previous year, many imposing total freezes, according to the latest Annual Asia Pacific Salary Increase Survey, conducted by global outsourcing and consulting firm, Hewitt Associates (NYSE: HEW).
Between July and September 2002, Hewitt surveyed 1,007 foreign, locally-owned and joint-venture companies representing approximately 874,000 employees in 13 countries/regions, including Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan, and Thailand.
Specifically, the study measures actual and projected salary increases and compensation practices for five job categories: Senior/Top Management, Manager, Professional/Technical/Supervisory, Clerical and Support, and Manual Workers.
All countries/regions showed an average overall salary increase for 2002 across job categories, with the IT sector in India recording by far the highest across all levels (16.4%). After India, the Philippines, China, Korea, and Indonesia offered the highest average salary increases, ranging from 6.4% to almost 10%, with the highest being in Indonesia. Last year, Philippine and Indonesian companies also offered among the highest salary increases, although the ranges were higher in 2001 than in 2002.
As in the previous two years, companies in the more developed economies of Hong Kong and Singapore recorded some of the lowest average salary increases over the five surveyed job categories, with ranges of 0.6% to 1.8% and 2.1% to 2.9%, respectively.
Projections by surveyed companies for 2003 indicate a slight rise in salary increases over 2002 in most countries/regions with the exception of those in Korea, which expect salaries to remain flat overall. The most optimistic employers surveyed were in Indonesia, where participants project average salary increases to rise from a range of 6.4% to 9.7% in 2002 to a range of almost 12% to almost 14% in 2003, and in the Philippines, rising from a range of about 7% to 8.2% in 2002 to 9.7% to 10.2% in 2003, a return to double-digit figures last seen in 2001.
The most widespread salary freezes in 2002 were experienced in Hong Kong, by 45% of survey participants, followed by Indonesia, by 33% of participants. This can be compared to 2001 when Taiwan recorded the highest percentage of salary freezes, at 11%. The lowest percentage of companies imposing salary freezes in 2002 was seen in China (7%), followed by Thailand (8%), with 50% of those in China being from the hi-tech industries.
In all countries/regions, a lower percentage of companies surveyed expect to impose or continue salary freezes in 2003, with China dropping to 2% and Hong Kong to 37%. In Australia only, none of the surveyed companies expected to impose a salary freeze in 2003.
"The smaller salary increases and the extent of total pay freezes recorded across the region do not come as a big surprise considering the continuing struggle of the global economies affecting most businesses in Asia Pacific," said Mick Bennett, managing director, Asia Pacific for Hewitt Associates. "The relatively higher average salary increases witnessed in China, India and Korea reflect the rapid development of these economies and continued foreign investment, despite the global downturn."
The survey also looked at variable pay as a percentage of total compensation, and the highest level of the variable element continued to be paid predominantly to employees in the Senior/Top Management job group. The highest level of variable pay in 2002 was recorded in Australia, where employees in Senior/Top Management were given 25% of their total compensation in the form of variable pay. In contrast, the average variable pay of Manual Workers in Australia was just 5%.
Hiring and Retaining Workers Still a Challenge for Many Companies More than 25% of all companies across the region expressed concern over employee attraction and retention. The highest percentage of companies affected was in China, where 52% of participants were concerned about attracting good quality employees, mostly in the sales, marketing and engineering functions. About 57% were concerned about retaining their employees, with the biggest issues experienced in the same job sectors.
Other countries/regions also heavily affected by the issues of attraction and retention were India, Korea, and Thailand. The concerns expressed in the survey in all countries/regions have not markedly changed since 2001.
"There is still a talent crunch in countries with developing economies, such as China, India and Korea," Bennett said. "The concerns over hiring and retaining talented employees often lead to an increase in pay for these workers. That said, in our work with companies in these countries, we are now seeing a greater interest in flexible compensation methods to fight the intense battle for the best employees."
Comparing Salary Findings in Asia Pacific with the U.S.
The Hewitt Associates 26th Annual "U.S. Salary Increase Survey" of 1,045 large companies revealed that average salary increases for 2003 are projected to be between 3.8% and 4.1%. This is a slight increase over 2002, which saw average salary increases range from 3.5% to 3.8%. Although increases in the U.S. are projected to be slightly higher next year, they are down from 2001, when base salary increases were between 4% and 4.5%. Meanwhile, 10% of organizations in the U.S. study reported a salary freeze in 2002, while only 1% expect to take this type of action in 2003.
"Average 2002 salary increase spending decreased significantly in the U.S., due in part to the domestic social, political, and economic events of the past 12 months," said Frank Johnson, Hewitt's Asia Pacific measurement practice leader. "Nevertheless, it's interesting to note that the salary fluctuations from 2001 through to 2003 expectations are consistent in both the U.S., and the Asia-Pacific region."
For details on how to obtain a copy of country reports, please send an e-mail to [email protected]
About Hewitt Associates
Hewitt Associates (www.hewittasia.com ) is a global outsourcing and consulting firm delivering a complete range of human capital management services to companies including: HR and Benefits Outsourcing, HR Strategy and Technology, Organizational Change, Retirement and Financial Management, and Talent and Reward Strategies. The firm provides services from 85 offices in 37 countries.
Highlights for all 13 countries/regions are also available on request.
For the Philippines, please contact:
Susan Manalo, +632-636-8093, [email protected]
Red Catacutan, +632-636-8093, [email protected]
For Singapore, please contact:
Boon Chong Na, +65-6438-2900, [email protected]
For Thailand, please contact:
Mana Lohatepanont, +662-636-0575, [email protected]
Nongnuch Obsuwan, +662-636-0575, [email protected]
For Korea, please contact:
Joshua Bang, +822-551-7200, [email protected]
Kris Park, +822-551-7200, [email protected]
For Malaysia, please contact:
Alan Parker, +603-2094-4088, [email protected]
Rajes Pillay, +603-2094-4088, [email protected]
For Japan, please contact:
Harutaka Hamaguchi, +813-5510-2300, [email protected]
Stephane Michaud, +813-5510-2300, [email protected]
Contact: Frank Johnson, +8621-6391-6788, [email protected]
Munish Malik, +852-2877-8600, [email protected]
SOURCE: Hewitt Associates
--Distributed by AsiaNet (www.asianetnews.net)--
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