Across the markets covered, the highest expected salary increases are in India and Indonesia, while the lowest raises are likely in Japan and Australia.
Markets in Asia Pacific (APAC) are expected to see the highest salary increases in 2022, the latest Salary Budget Planning Report by Willis Towers Watson has revealed. While this is so, countries in North America and Western Europe are expected to "stay flat", with the rest of the regions taking longer to recover and stabilise.
According to the report, companies in APAC are projecting average salary increases of 5.3% for executives, management and professional employees, and support staff next year, up from the average 4.9% increases employees were granted this year.
Further, emerging markets such as India (8.8%) and Indonesia (6.5%) are forecasting significant salary budget increases for 2022, compared with this year.
Overall, the projected salary increases by market, in 2022, are as follows:
- 2022: 3.4%
- 2021: 2.9%
- 2022: 5.9%
- 2021: 5.5%
- Hong Kong:
- 2022: 3.6%
- 2021: 3.2%
- 2022: 8.8%
- 2021: 8.0%
- 2022: 6.5%
- 2021: 5.7%
- 2022: 2.5%
- 2021: 2.2%
- 2022: 5.0%
- 2021: 4.3%
- 2022: 5.6%
- 2021: 5.0%
- 2022: 3.7%
- 2021: 3.2%
- South Korea:
- 2022: 4.1%
- 2021: 3.7%
- 2022: 3.5%
- 2021: 3.4%
- 2022: 4.6%
- 2021: 4.2%
- 2022: 7.4%
- 2021: 7.0%
Per the report, the higher salary increases in 2021 are partially attributed to few companies freezing pay increases this year, compared to in 2020.
"In 2020, an unprecedented number of companies cancelled salary reviews (30%) in APAC, whereas in 2021, the figure dropped to 13% and is forecast to return to the low level of 2.5% next year. Notably, rises are returning to close to pre-pandemic levels. The larger rises coincide with a surge in demand for labour and a shortage in supply of specific professional roles with premium skills.
"Companies are also going through extensive planning in 2021 and will be experimenting with hybrid models that better fit employees’ lifestyles, which may also result in long-term business savings. The buoyant job market and the challenge of engaging employees outside of an office environment mean that companies will need to pay top dollar to hold on to their top talent."
Additionally, with many markets recovering, attrition rates have also moved up in countries with positive business outlooks, including Australia, China, Singapore, Taiwan, and Vietnam, the report noted.
Singapore: Average salary increases projected at 3.7% in 2022
In a market-specific breakdown, the report shared that close to 50% of companies in Singapore expect their business performance to be ahead of target this year, and 47.3% to be in line with their business outlook for 2021.
Thus, employers in Singapore are expecting an average salary budget increase of 3.2% for 2021 and 3.7% for 2022.
Apart from this, the report further revealed:
- Organisations in Singapore are likely to create more jobs in functions such as sales, information technology, and engineering.
- About 27% of companies plan to increase headcount in the next 12 months. Compared to last year, this is a positive outlook as only 12% of companies were planning to add headcount in their recruitment plans for 2021.
- Increments are expected across the board in organisations, particularly at junior and mid-levels, partially driven by the turnover rates at these levels.
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