By Chuang Peck Ming
Employers still in need of workers in the Asia-Pacific economies remain mindful of the inflationary pressures as they work out pay increases in 2012, according to a survey by Towers Watson.
So pay hikes this year, including those in Singapore, are likely to still outpace price increases, the global professional services firm's 2012 Asia Pacific Salary Budget Planning Survey concludes. Highlights of the survey results were released yesterday, two days before Singapore's National Wages Council is due to unveil its latest wage guidelines.
Employers polled in Singapore, where inflation is currently around 5 per cent but is projected to ease to 3.5-4.5 per cent for 2012, have earmarked a 4.5 per cent raise for employees.
In Hong Kong and Australia, employers are planning for increases of 4.7 per cent and 4.3 per cent respectively.
The financial sector in Singapore is likely to see the biggest pay hikes, with employers in the sector budgeting for rises of around 5.1 per cent - higher than the 5 per cent, 4.9 per cent and 4.8 per cent respectively for the pharmaceutical, automotive and chemical sectors.
"Respondents from the fast moving consumer goods, high tech and energy sectors are budgeting wage hikes of 4.5 per cent, 4.4 per cent and 3.9 per cent respectively," Towers Watson says in its press release.
Of the 18 markets covered in the survey, salary budgets in the more developed ones are projected to rise 3-5 per cent this year, against 6-12 per cent for those in the emerging markets.
The survey, done in February and March, polled 1,499 employers in a wide range of industries.
Almost half - 48 per cent - say that they intend to raise their headcount in 2012, despite a "significant number" of the overall employers polled saw flat growth in business.
Positions most in need of filling include sales and marketing, accounting, manufacturing, operations and engineering.
Only 4 per cent of the employers say that they intend to reduce headcount.
Except for Vietnam, salary growth in all the markets are likely to outpace inflation - mostly notably in China, India and Indonesia, according to the survey.
Pay is tipped to lag behind inflation in Vietnam, even when employers there are planning to give increases of about 12.2 per cent.
India, where inflation eased from a high of 8.65 per cent in March to 7.23 per cent in April, is the only other market in the survey that's expected to see a double-digit salary hike - 11.5 per cent - this year.
Employers in Indonesia and China are close behind, with planned salary increases of 9.5 per cent and 8.8 per cent respectively.
Salaries in Japan are expected to rise 2.6 per cent this year - the lowest hike in the survey.
"When employees grapple with the rising cost of living, they naturally look to receive higher pay from current employer or look for alternative jobs," says Rachelle Arcebal, Towers Watson's global data service practice leader.
"Companies need to be able to find the balance between meeting these expectations and practising prudent financial planning."
This article was first published in The Business Times.