Salary growth in India is expected to be highest in Asia at 9.2% in 2020: Report
As per the latest The Korn Ferry Global Salary Forecast, salary growth in India is expected to be highest in Asia at 9.2% in 2020. However, the inflation-adjusted real-wage in India is anticipated to be constant at 5%.
Rajiv Krishnan, Managing Director, Korn Ferry Advisory India said, “India has posted a strong growth despite real wages taking a hit globally. With our current economic scenario and progressive reforms by the government, there is a sense of cautious optimism across sectors in India that continues to show high salary increments. We recommend organizations to re-examine their talent strategies and remuneration and reward policies, considering the rising cost of living, leading to marginal real wage increases.”
The data was drawn from Korn Ferry’s pay database which contains data for more than 20 million job holders in 25,000 organizations across more than 130 countries.
According to the forecast, salaries are predicted to grow at a rate of approximately 4.9% globally in 2020. With a global inflation rate prediction of approximately 2.8%, the real-wage salary increase prediction at 2.1%. The highest real wage growth is expected in Asia, with salaries forecast to grow by 5.3% in 2020 and real-wage salaries are expected to be 3.1%, with an inflation rate of 2.2%.
In Asia, Indonesia is forecasted to have a salary growth of 8.1%, whereas, Malaysia, China and Korea is expected to have a salary growth of 5%, 6% and 4.1% respectively. The lowest salary growth is expected in Japan and Taiwan at 2% and 3.9% respectively.
2.5% growth in Australia, 3% in US
Meanwhile, Australia will see a 2.5% top-line growth, which is the same as last year. With a 1.5% inflation rate, a 1.0 real-wage increase is predicted. That’s up from 0.2% last year. In New Zealand, a 2.5% salary increase is also forecast, and with 1.9% predicted inflation rate, the real salary increase is expected to be 0.6%, which is up from last year’s 0.3% real salary increase.
In the United States, an average 3% pay increase is predicted, which is the same as last year and the year before. Adjusted for the expected 1.6% inflation rate in 2020, the real wage increase is forecast to be 1.4%, up from last year’s 0.6%. Canadian workers will see salaries increase by 2.6%, which is the same as last year. With inflation predicted at 1.9%, the real-wage predicted increase is 0.7%, up from last year’s 0.6%.
While it is good news that salaries in India continue to grow, however, that growth is not even. Given the tighter increment grids to stretched increment percentages, companies will continue to differentiate their top performers, high potentials and critical talent sharply. While inflation indices are a solid benchmark for reviewing market trends, however organizations need to review compensation programs regularly to make sure they align with changing business and market conditions.