Employees in India may be in for a pleasant surprise as a double-digit salary hike is on the cards this year — the highest in Asia — a global consulting firm has said in a recent report. However, due to inflation, the net effective hike in 2019, or the real wage growth, might remain at 5%.
A 10% increase in salaries is expected this year 2019 as compared to last year’s 9%, the report said. After adjusting inflation, the real wage hikes might be at 5% from previous 4.7%, the report by global consulting firm Korn Ferry said. Among Asian countries, India enjoys the highest overall salary increase and real-wage growth, it said.
A broader perspective is required by the companies for defining their business strategy and cost drivers as there is a rise in automation, Navnit Singh, Chairman and Regional Managing Director, Korn Ferry India said in the report. Also, use of new technology and the rising demand for skilled workers should be kept in mind when defining business strategy, he added.
“Compensation programmes need to be regularly reviewed to make sure they align with the changing business and market conditions,” he said.
How will other Asian countries fare?
According to the report, Asian countries might see an increase by 5.6%, up from 5.4% last year. Inflation-related adjustments leave the hike to 2.6%, which is the highest in global standards. The previous year hike was 2.8% in the Asian countries.
After India, Vietnam’s real-wage prediction is the highest in Asian countries at 4.8%, followed by Indonesia’s at 3.7%. China’s prediction stands at 3.2 % for 2019, Singapore’s at 3%. Japan’s real wage prediction is at the lowest with 0.1%.
Across the Sea
Employees in Eastern Europe will not be doing better than their Asian neighbours as they are set to see an average salary increase of 6.6% in 2019, according to the Korn Ferry forecast. After inflation adjustments, their real wage forecast is a rise of 2%.
In the UK, real wages are expected to increase by just 0.6%, the report added. ?With inflation rising in most parts of the world, we’re seeing a cut in real-wage increases across the globe,? Korn Ferry Global Head of Rewards and Benefits Solutions Bob Wesselkamper said.