Salaries in Southeast Asia Expected to Rise in 2025

Budgeted pay increases in Singapore and Thailand are expected to trail other countries in the region, according to research from Aon.

By Maggie Mancini

Aon plc, a leading global professional services firm, has announced findings from its 2024 Salary Increase and Turnover Study for southeast Asia. The study analysed the salary adjustments and turnover rates of more than 950 companies across Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.  

The survey finds that across the entire region, the budgeted salary increases are expected to be higher in 2025 than in 2024. Salary increases are projected at 6.7% for Vietnam, 6.3% for Indonesia, 5.8% for Philippines, 5% for Malaysia, 4.7% for Thailand, and 4.4% for Singapore.  

Salary increments will also vary across industries throughout the region, with technology and manufacturing budgeting for the highest salary increases at 5.8%. These are followed by retail, consulting, business and community services, and life sciences at 5.4%, energy at 4.9%, financial services at 4.8%, and transportation at 4.1%.  

The study further reveals that 64% of companies report challenges in hiring or retaining employees, with one in three firms looking to increase headcount between 5% and 20%. Despite these challenges, organisations are maintaining or increasing overall workforce numbers slightly by focussing on hiring individual contributors and streamlining middle management.  

Attrition rates also vary across industries, with the consulting, business, and community services industry having the highest rate at 23%, followed by life sciences at 18.4%, energy at 18%, financial services at 17.8%, manufacturing at 16.5%, technology at 15.1%, and retail at 11.2%.  

Among all industries, the technology sector kept a steady involuntary turnover rate that remained unchanged at 4% from 2023 to 2024. Conversely, industries like retail have stabilised as consumer spending improved. 

The most difficult positions to fill continue to be in information technology, engineering, and sales, which is consistent with 2023. In response to cost constraints and the need for greater cost efficiency, companies are adjusting their compensation strategies. New hire premiums have dropped from previous levels between 5.6% and 13.3% and now range between 1.3% and 8.2%.