Survey of Thai firms shows more emphasis on variable pay than salary
Thai companies are expected to make a slight upward adjustment in salaries and variable bonus payments this year over 2009, according to a survey conducted by Towers Watson, a global professional services firm.
Bubhawadee Owararinth, managing director of Towers Watson (Thailand), said the global economic slowdown had brought down the base salary adjustment rate to 5.1 per cent last year, from 6.5 per cent in 2008, but this year it was projected to edge up slightly to 5.2 per cent.
However, among 18 industries covered in the survey, manufacturing is the only industry that plans a higher salary adjustment increment this year - 6.5 per cent versus 6.3 per cent last year (see graphic). All other industries will see reduced salary increases this year, she said.
The energy/power industry's 2010 salary increase is projected at 5.75 per cent, and the automotive industry at 5.72 per cent. Due to a licensing issue and competition, the pharmaceutical industry's salary increase rate is expected to drop significantly from 6.8 per cent last year to 4.3 per cent in 2010, she said.
The projected salary increase for all industries in 2010 is 5.46 per cent, led by consumer goods (6.8 per cent), followed by energy/power (6.75 per cent) and manufacturing industries (6.67 per cent).
Nevertheless, Bubhawadee pointed out that the basic salary had reduced in importance during recent years, since companies had shifted focus to variable pay linked to performance, such as variable bonuses and sales incentives. The 2010 average variable bonus projection for all industries is 2.87 months, up from 2.7 months last year, with senior management getting the highest rate of 3.09 months, followed by top management with 2.99 months.
Among industries, the energy/power industry has the highest 2010 average projected pay-out of 7.3 months, followed by automotive with 6.2 months and pharmaceuticals with 4.1 months.
In 2011, energy/power is also projecting the highest average variable bonus pay-outs, followed by automotive and pharmaceuticals. The projected 2011 average variable bonus for all industries is 3.84 months, with senior management getting the highest rate of 4.27 months, followed by top management with 4.18 months.
The survey also shows staff turnover rates decreasing from 12.6 per cent in 2008 to 8.5 per cent last year, and 6.9 per cent this year. By industry, consumer goods has the highest projected turnover rate of 7.6 per cent, followed by pharmaceuticals (6.7 per cent).
The turnover rate of the banking industry, however, is forecast to rise from 3.9 per cent last year to 4.4 per cent this year.
Duenpen Pawakranond, senior vice president of Kasikornbank, said that because of the global economic crisis, the bank had underestimated its staff turnover situation. The number of employees quitting the bank hit a record level last year.
"Nowadays people have fewer children. The new generation [of staff] will quit easily when they're pressured by sales targets. They are impatient," said the KBank executive.
