With annual salary appraisal cycle round the corner, there is good news for people in India. According to a report from American firm, salary hike in India are expected to be highest in Asia-Pacific region.
In the recently released Korn Ferry 2019 Global Salary Forecast, the Los Angeles based firm said that salaries in India are expected to increase by 10 per cent in 2019 as compared 9 percent last year. After adjusting the iinflation, the real-wage increases are expected to be 5.0 percent in 2019, up from 4.7 percent last year.
“Consequent to rapid economic growth, India continues to enjoy the highest overall salary increases and real-wage growth in Asia, said Navnit Singh, Chairman & Regional Managing Director, Korn Ferry India, adding that inflation indices are a solid benchmark for reviewing market trends in pay, but companies must take a broader perspective to define their business strategy and cost drivers.
Korn Ferry asserted that its predictions are based on the survey and database of more than 20 million job holders in 25,000 organizations across more than 110 countries. According to the forecast, in Asia, salaries are expected to increase by 5.6 percent, up from 5.4 percent last year. Inflation-adjusted real-wage increases are expected to be 2.6 percent, the highest globally, but down from 2.8 percent last year.
China’s real-wage forecasted growth for 2019 weakened at 3.2 percent, down from 4.2 percent last year. Japan saw a real-wage prediction of 0.1 percent for 2019 compared to the 2018 prediction of 1.6 percent. Apart from India, other Asian countries that saw year-over-year increases in real wages include Vietnam (forecast of 4.8% in 2019 Vs 4.6% last year), Singapore (forecast of 3.0% in 2019 Vs 2.3% last year), Indonesia (forecast of 3.7% in 2019 Vs 3.4% last year)
In the Middle East, wages are expected to increase by 3.6 percent, compared to 3.8 percent last year. Inflation-adjusted wage increases are predicted to be 0.4 percent, compared to 0.9 percent last year and 2.5 percent the year before. Things are looking better in the UAE this year, with an inflation rate of 3.2 percent combined with pay increases of 3.9 percent, which means that real wages are expected to increase by 0.7 percent. Last year real wages were predicted to fall by -0.5 percent.
Wages in the Pacific are forecast to grow by 2.5 percent, and adjusted for inflation, the rise in real wages is predicted to be 0.3 percent. Australia will see a 2.5 percent top-line growth, a 2.3 percent inflation rate, and a 0.2 percent real-wage increase.
Eastern Europe vs Western Europe
According to the Korn Ferry forecast, employees in Eastern Europe are set to see an average salary increase of 6.6 percent in 2019. After taking inflation into account, real wages are forecast to rise by 2.0 percent. In Western Europe, workers are expected to see lower wage increases, with an average increase of 2.5 percent, and inflation-adjusted real wage increases of 0.7 percent.
Wages are predicted to increase by 2.5 percent in the United Kingdom. Combined with a 1.9 percent inflation rate, real wages are expected to increase by 0.6 percent. This is up more than a percentage point from 2018, when wages were predicted to decrease by -0.5 percent. Employees in two of Europe’s largest economies, France and Germany, are forecast to see real-wage rises of 0.5 percent and 1.0 percent respectively.
Although top-line salaries will increase by 7.7 percent in Africa, high inflation means the real increase is predicted to be only 0.9 percent. In Egypt, salaries are expected to increase by 15 percent, but a 14.4 percent inflation rate means employees will only see a 0.6 percent real-wage increase.
Employees in Latin America are forecast to see a 4.6 percent gain in wages. With inflation, the real-wage increase in the region is expected to be 1.3 percent. This is down from 2.1 percent real-wage growth predictions from last year.
North America Lagging
In North America, the average salary growth is predicted to be 2.8 percent in 2019, and when adjusted for inflation, the real-wage growth is expected to be 0.6 percent.
In the United States, an average 3 percent pay increase is predicted, which is the same as last year and the year before. Adjusted for the expected 2.4 percent inflation rate in 2019, the real wage increase is forecast to be 0.6 percent, down from last year’s 1.0 percent.
Smaller Real Wage Increases Across Most Parts of the World
Globally, real-wage salaries are expected to grow only an average of 1.0 percent in 2019. This is down from a 1.5 percent prediction for 2018.
“With inflation rising in most parts of the world, we’re seeing a cut in real-wage increases across the globe,” said Bob Wesselkamper, Korn Ferry Global Head of Rewards and Benefits Solutions. “The percentage of salary increase or decrease will vary by role, industry, country and region, but one thing is clear, on average, employees are not seeing the same real pay growth they did even one year ago.”