Salaries will continue to rise in 2023 amid a tight labour market and growing inflation in Asia Pacific (APAC), according to the annual Total Remuneration Survey (TRS) 2022 conducted by Mercer.
Findings of the report indicate that, despite a divergent economic outlook across markets in APAC, companies in the region are forecasting an average 4.8% increase in overall salaries next year. This is a slight increase from 4.6% this year, which has seen inflation peak in many markets.
For markets like India, Malaysia, New Zealand, Philippines and Taiwan, the inflation rate in 2023 will be close to 2021 levels, while it will remain considerably higher than 2021 levels in most other markets in the region, including Singapore, Hong Kong SAR and Japan. Hence, while salary increments will increase next year, real salary increase will be nominal across the board, with the exception of Mainland China, India and Vietnam, reveals the report.
Increase in salaries across most markets – India has the highest projected salary increase at 9.1%, followed by Vietnam (7.1%), Indonesia (6.1%), and the Philippines (5.5%). Conversely, Japan (2.2%) has the lowest salary increase, followed by Australia (3.1%) and New Zealand (3.2%).
The retail and wholesale industry is expected to see the biggest upturn with 5.4% salary increment, up from 4.7% in 2022, due to a significant rebound of both in-store and online sales as most markets open up. Transportation Equipment is forecasting the highest increase at 5.6% as growth in global trade and e-commerce activities has boosted demand for shipping and delivery services. The Services (Non-Financial) sector is expected to see the lowest increase at 4.7%.
Based on the mid-year 2022 voluntary turnover rates, markets like New Zealand, India, Vietnam, Malaysia, and Hong Kong SAR have the highest attrition.
Talent shortages are prevalent in many markets. For example, close to 83% of employers in Mainland China are finding it difficult to fill jobs – as compared to 28% in 2021. Similarly, in markets like Singapore (84%, up from 64% in 2021) and Hong Kong SAR (83%, up from 68% in 2021).