Korn Ferry 2018 Salary Forecast: Asia Sees Highest Real Wage Growth, Though at Slower Pace Than Last Year

General Press Releases Tuesday December 19, 2017 09:50
Bangkok--19 Dec--Vivaldi Public Relations
  • Smaller Real Wage Increases Across Most Parts of the World Adjusted for Inflation, Real Wages Up Only an Average of 1.5 Percent –
  • U.S. Real Wage Growth Half of What it Was Last Year -
  • U.K., UAE and Egypt See Declines in Real Wages-
A forecast issued today by the Hay Group division of Korn Ferry (NYSE: KFY) reveals that Asia will see highest real wage growth, though increases have slowed from previous year.

In Asia, salaries are forecast to increase by 5.4 percent – down from 6.1 percent last year. Inflation-adjusted real wage increases are expected to be 2.8 percent – the highest globally, but down from 4.3 percent last year. China remained consistent with real wage increases predicted at 4.2 percent for 2018, compared to 4 percent last year. Most countries in this region saw a drop in year-over-year real wage prediction increases – including Vietnam's forecast of 4.6 percent, down from 7.2 percent, Singapore at 2.3 percent, down from 4.7 percent, Japan at 1.6 percent, down from 2.1 percent and Thailand at 4.5 percent, down from 5.6 percent.

Smaller Real Wage Increases Across Most Parts of the World
Adjusted for inflation, employees around the world are expected to see real wage increases of only an average of 1.5 percent, down from 2017's prediction of 2.3 percent and 2016's prediction of 2.5 percent.

"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."

Australasia Sees the Lowest Real Salary Increase

Wages in Australasia are forecast to grow by 2.5 percent, which is an increase of 0.7 percent in real wages when adjusted for inflation. Australia will see a 2.5 percent top-line growth, a 2.1 percent inflation rate, and a 0.4 percent real wage increase. In New Zealand, a 2.5 percent salary increase is forecast, with 1.5 percent inflation, for a 1 percent real salary increase.

North America Lagging

In the United States, an average 3 percent pay increase is predicted, which is the same as last year. Adjusted for the expected 2 percent inflation rate in 2018, the real wage increase is 1 percent – down from last year's 1.9 percent. Canadian workers will see salaries increase by 2.6 percent, and with inflation at 1.7 percent, will experience real wage growth of 0.9 percent.

Eastern Europe Faring Better than Western Europe

According to the Korn Ferry forecast, employees in Eastern Europe are set to see an average salary increase of 6 percent in 2018. However, after taking inflation into account, real wages will only rise by 1.4 percent, which is down from 2.1 percent last year. In Western Europe, workers are expected to see lower wage increases, with an average increase of 2.3 percent, and inflation-adjusted real wage increases of 0.9 percent.

With the continued uncertainty following the Brexit decision, wages in the United Kingdom are up just 2 percent. Combined with a 2.5 percent inflation rate, real wages are expected to decrease by -0.5 percent. This is in contrast to 2017, when inflation-adjusted wages in the U.K. were up 1.9 percent. Employees in two of Europe's largest economies, France and Germany, are forecasted to see real wage rises of 0.7 percent and 0.8 percent respectively.

Smaller Increases in the Middle East

In the Middle East, wages are expected to increase by 3.8 percent, compared to 4.5 percent last year. Inflation-adjusted wage increases are predicted to be 0.9 percent, compared to 2.5 percent last year. In the UAE, inflation of 4.6 percent combined with pay increases of only 4.1 percent, means that real wages will fall by -0.5 percent.

Jordan and Lebanon saw the biggest drops in the region, with Jordan predicted to have a 1.6 percent real wage growth, down from 6.3 percent last year, and Lebanon predicted at 1.8 percent compared to 6.1 percent last year.

Inflation Tempers Salary Growth in Africa

Although top-line salaries will increase by 8.5 percent in Africa, high inflation means the real increase is only 1.7 percent, which is up from 0.7 percent last year. In Egypt, top-line salaries will increase by 15 percent, but an 18.8 percent inflation rate means employees will see a cut in real wages of -3.8 percent.

Latin America Sees Second-Highest Real Wage Growth

Employees in Latin America are forecasted to see a 6.2 percent increase in wages, and with inflation slowing down in the region, real wage increases will reach 2.1 percent, up from last year's 1.1 percent. In Colombia, inflation is expected to be 2.7 percent for 2018. With a salary increase projected at 5.3 percent, this puts real wages for Colombia up 2.6 percent. In Brazil, the expected salary increase is 7.3 percent, and with 4 percent inflation, the real increase is expected to reach 3.3 percent.

"Slower economic growth in mature economies keeps a check on pay raises," said Wesselkamper. "In emerging economies, upskilling workers is crucial for companies to maintain a competitive advantage – and those skilled employees can expect to see wages rise as talent shortages in certain regions drive salaries upward."

Korn Ferry pay experts recommend taking a holistic approach when determining pay.

"While inflation indices are a solid benchmark for reviewing market trends in pay, we recommend that companies take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and local trading conditions," said Benjamin Frost, Korn Ferry's Global General Manager – Pay. "Compensation programs need to be regularly reviewed to make sure they align with changing business and market conditions."


Latest Press Release

Photo Release: CHATRIUM HOSTS NEW YEARS PARTY FOR CHILDREN AT CHATRIUM BALLROOM, CHATRIUM HOTEL RIVERSIDE BANGKOK

Mrs. Savitri Ramyarupa, Managing Director Chatrium Group, together with Chatrium managers and Chatrium Hotels & Residences associates, hosted a New Year's Party for Children from the Foundation of the Blind Thailand (Under the Royal Patronage of H.M....

Boutique Corporation Brightened the Holidays for Intanon Wittaya School in Chiang Mai, Gifting Ten New Desktop Computers for Students

Christmas arrived early for the Intanon Wittaya School in Chiang Mai, when top executives from leading Thailand property development company Boutique Corporation PCL presented ten desktop computers to the school. Inthanon Wittaya School is located in...

Photo Release: The 20th Annual Amari Watergate Bangkok Charity Midnight Run

David Cumming (fourth from left), Regional Vice President of Operations for Bangkok, Malaysia and Laos of ONYX Hospitality Group, alongside being the General Manager of Amari Watergate Bangkok, recently presided over a press conference at the Amari...

CPF Hongkong hosted the second edition of EGGnergy Run

CPF Hongkong Co.,Ltd (CPF Hongkong) hosted the second edition of "CP EGGnergy Run" to encourage Hong Kong people to exercise and promote high nutritional value and benefit of eggs. The event was held at Science Park, Tai Po and joined by over 1,400...

PTT Group aids solutions to improve air quality

Mr. Chansin Treenuchagron, President & Chief Executive Officer PTT Public Company Limited, reveals that PTT as a national energy company has developed fuel that continuously enhance the quality of life and environment. Starting with unleaded gasoline...

Related Topics