salaries rise as employees face higher expenses

Among Thai companies, salary adjustment for next year is expected to be slightly higher than this year, a flash survey conducted by leading human-resources consulting company Hewitt Associates revealed.

Pornpimon Maneewongwattana, practice leader for compensation at Hewitt Associates (Thailand), said the online survey undertaken from the end of last month to early this month found Thai companies forecasting an average 7.1-per-cent hike in salaries next year. The expected rate is slightly higher than this year's, which stood at 6.8 per cent, and last year's when the average raise was 6.5 per cent, she said. 

Inflation touched a 10-year high of 8.9 per cent last month, chiefly due to soaring oil prices.

Among industries, the highest salary increases next year are expected in the beverage industry, at 7.6 per cent, followed by manufacturing, at 7.5 per cent. The IT industry is expected to provide the lowest salary increase, at 6.5 per cent.

This year, the insurance industry and the pharmaceuticals industry gave the highest salary hikes at 7.2 per cent, while the lowest increase was seen in the beverage industry and manufacturing industry at 6 per cent, Hewitt's studies showed.

Hewitt usually conducts its annual salary survey in October, however, the above results came as part of its "Hot Topic" survey on "the impact on compensation because of increasing oil and gas prices and cost of living". Seventy companies participated in the survey.

Pornpimon said she was surprised to learn that as many as three-quarters of the companies surveyed had already made (54 per cent) or were considering (22 per cent) providing extra adjustments to their employees in the next two to six months to help their staff cope with the rise in oil and gas prices, and the cost of living.

"Companies could have chosen not to make the [extra] adjustments, but they have," she said.

Of the 54 companies providing or intending to provide adjustments, half (50 per cent) had responded through the monetary-compensation approach. Six per cent of these companies have responded through non-monetary means. The remaining 44 per cent had made adjustments through a combination of monetary and non-monetary compensation means.

More lower-level employees, such as office staff, skilled staff and junior management, received the adjustments, as compared to senior executives.

However, just over half of daily-wages and unskilled workers received adjusted compensation.

"Perhaps, it's because the staff  who are affected most were those who have to use their own vehicles, while daily and unskilled workers may be living near their companies, or are being provided transport services by the companies already," Pornpimon said.

Various types of monetary-compensation adjustments were reported. The most prevalent type was paying an additional amount over the base salary (37 per cent) and a fixed amount added to the existing allowance (33 per cent).

Twenty-five per cent of the companies decided to introduce the additional, fixed amount as a new allowance for employees.

A few of the companies provided other types of monetary allowances, which included paying an additional amount as a gap between the current and the raised oil and gas prices (8 per cent), a percentage increase direct to the base salary (4 per cent) and actual reimbursement (2 per cent).

The fixed-amount adjustments range between Bt360 and Bt2,000 per employee, depending on their levels in the companies, though the median value is Bt1,000, she said. Companies had raised petrol allowances for their staff by Bt1,500 and for their senior management by Bt2,500. Oil reimbursement is averaged at Bt8 per kilometre. 

Of the companies choosing not to make an adjustment, or still considering one, 43 per cent cited budgetary constraints as a decisive factor. An absence of regional or global policies was cited as a reason by 38 per cent of the companies, while 33 per cent were waiting for other companies to make an adjustment and envisioned providing the extra amount as an annual salary increase.

Twenty-four per cent of the companies believed the current compensation package was good enough for employees and 14 per cent said that the uncertain political situation was a major reason for not making an adjustment to the salaries.