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Industry-wise, within the region, retail is expected to see the highest increase in salaries (6.5%), followed by technology and life sciences (6.1%), and financial institutions (5.9%).
Salaries in Southeast Asia are expected to increase "slightly" in 2023 as compared to 2022, according to Aon's 2022 Salary Increase and Turnover study, released today (8 December).
Looking at specific markets in the region, the study revealed the highest forecasted median salary increase budget in Vietnam, at 7.9%, along with the following forecasts for other markets in the region:
- Indonesia: 6.8%
- The Philippines: 6%
- Malaysia: 5.1%
- Thailand: 5.1%
- Singapore: 4.7%
Expected salary increases in industries across Southeast Asia in 2023
Industry-wise, within the region, retail is expected to see the highest increase in salaries (6.5%), followed by technology and life sciences (6.1%), and financial institutions (5.9%).
Per the findings, roles in technology and data analytics could see higher year-on-year increases in salaries and total compensation as a result of the ongoing technology and digital skills shortage across the region. This shortage, it was highlighted, comes as companies "compete to accelerate transformation and drive their digital initiatives."
That said, employers are continuing to take a cautious approach and focus on salary increases for selected groups or levels of employees, in view of a potential global economic slowdown.
Attrition rates reported in individual markets
The above aside, the study also noted that while inflation does indeed play a part in how salary changes fare, these changes are also driven by the supply and demand of talent in the market. On that note, it highlighted the level of attrition in individual markets in 2022, which have placed pressure on firms to use compensation measures to tackle hiring and retention challenges.
Across markets surveyed, Singapore observed the highest attrition rate, at 19.6%, followed by the Philippines (18%). The rest of the markets fared as follows:
- Indonesia: 15.9%
- Thailand: 15.4%
- Vietnam: 15.2%
- Malaysia: 14.9%
Commenting on the findings, Rahul Chawla, Partner and Head of Human Capital Solutions for Southeast Asia at Aon said: "While it is critical for businesses to define and adapt pay for different worker types and the nature of the work, organisations must stay agile as they rethink their pay principles. Businesses need to shape their strategies towards long-term drivers of pay and performance by making changes in a phased manner to optimise pay effectiveness."
Companies must define their 2023 salary increase approach in the context of the competitiveness of their current salary levels and employee value proposition, he added.
The 2022 Salary Increase and Turnover study was conducted in the third quarter of 2022, surveying the salary changes and turnover rates of more than 700 companies across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Lead image / Provided by Aon
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