Venezuela – 29%
Vietnam – 12.8%
Indonesia – 10.6%
India – 10.5%
China – 9.5%
Philippines – 8%
Malaysia – 6.2%
Thailand – 6%
Korea – 5.3%
Australia – 4%
Singapore – 4%
New Zealand – 3%
Germany – 3%
UK – 3%
USA – 3%
Canada – 2.9%
France – 2.6%
Japan – 2%
Ireland – 0%
Greece – 0%
In New Zealand, pay will rise by an average of just three percent in 2013 whereas in less mature markets including Vietnam (12.8%), Indonesia (10.6%), India (10.5%), the Philippines (8%) and Malaysia (6.2%) salaries are expected to increase rapidly. In China workers can expect salary increases of 9.5% (up 1.1% on last year) as the intensifying ‘war for talent’ continues despite slowing economic growth.
Interestingly, pay rises in the second generation of high growth Asian economies are outstripping those of their colleagues in the region’s more developed countries. For example, in Japan, salaries will increase by just 2% next year.
Simon Woolley, business unit manager at Hay Group (NZ), said New Zealand organisations are facing an increasing talent threat from maturing markets in nearby Asia, but more acutely for now from Australia given the similarities in language and culture.
“Globally importing human capital is the new norm as the need to employ ‘the right people’ intensifies. If your employees lack job security, feel overworked and under-rewarded, then there is high chance that they will be attracted to economies or organisations that are continuing to grow strong, and that offer greater opportunities for career development and reward flexibility. It is evident that Australia is doing very good job of marketing itself to New Zealand with record 53,700 people moving across the ditch over the past year,” said Woolley.
“As result, New Zealand organisations need to ensure they have reward strategies in place that deliver strong incentives to retain and attract employees despite modest pay increases. Non-financial retention strategies such as an engaging work environment and the provision of growth and development opportunities are key to this process.”
According to Hay Group’s research, salaries in developed Western economies will experience the smallest increases in 2013, as GDP growth remains broadly flat.
Across North America, pay will rise by 2.9% – the lowest of any global region – and in Europe, crisis-weary companies in Greece and Ireland will not raise pay next year, against subdued regional average of 3.3%. Increases in Germany and the UK (both 3%) and France (2.6%) will also be subdued and across the region salary increases on offer will be lower than in 2012 when the average salary increase was 5.5%.
“It is no secret that employees in developed markets face tough year ahead in terms of minimal salary increases. However, despite the weak outlook there is an upside for New Zealand workers as it is forecast they will likely receive higher average pay rises than many of their Western counterparts,” said Woolley.
Latin America will experience the highest overall rise in salaries next year (9%), with Venezuelan workers set to see wages jump by colossal 29% – driven largely by high inflation.
• For more information, download Hay Group’s global pay forecast analysis.
