Thanks to low inflation, the APAC region tops the list of the markets expected to see salary increases next year.
By Zee Johnson
Workers in several Asian countries and cities are expected to see significant salary increases in 2022, according to ECA International’s (ECA) Annual Salary Report.
The report, which analyses current and projected salary increases in more than 70 countries and cities globally, found that the APAC region is steadily pushing past other global markets when it comes to scaling compensation. The predicted average increase after inflation lands at 1.9% across the region -a higher average than any other region. The global real salary increase is forecasted to be an average of 0.9%.
Lee Quann, regional director, Asia at ECA International, says that APAC’s low inflation levels helped the region’s salary increases top the list. “Although some regions, such as the Americas and Africa and the Middle East, have a higher nominal increase forecasted, the APAC region is predicted to have much lower levels of inflation in 2022. This means that once inflation is taken into account, workers in APAC will see a much higher real salary increase than anywhere else in the world,” he said about the report.
Here are the top three APAC countries that are expected to see the biggest gains in 2022.
Whilst China has the second highest expected salary increase (4.0%), Quann notes that this number could change if impacted by looming Chinese COVID-19 policies. “At this point in time, workers in China are expected to see the second largest real salary increase in Asia Pacific in 2022. However, there are several threats to this which include the extent to which China’s zero-Covid policy may impact economic growth as well as the potential for inflation rates to surpass forecasted levels in 2022,” he said.
Singaporean workers will witness an average salary increase of 3.5% before inflation, with the actual percentage of increase likely to fall around 2%. An increase of this magnitude is likely to move the country along in its COVID-19 recovery, especially with a decrease in the number of organisation’s planning to implement a pay freeze. “Workers in Singapore are set to see a notably higher increase to their salaries than in previous years, with the predicted 3.5% rise up from 2.8% this year and 2.5% in 2020. Similarly, we are forecasting that just 6.0% of companies based in Singapore will implement a pay freeze in 2022, significantly down from the 22.0% that put in a pay freeze this year. This all points to a much-improved outlook for workers in Singapore as the economy gradually recovers from Covid related restrictions and uncertainty,” he said.
Other countries like Indonesia, Thailand and Malaysia will also see salary increases.
For the APAC region, the boost in employee pay will help spearhead economic growth and recovery, allowing many sectors to return to normal.
“Indonesia and Malaysia were among the countries most impacted by the pandemic and are expected to see some of the biggest jumps in rates of salary growth in Asia Pacific in 2022 compared to 2021, as their respective economies start to return to normality after the pandemic. If these countries are able to keep inflation under control in 2022, the improved economic outlook will mean that real salary increase rates for workers in these countries will be some of the highest in the region,” he said.