Korn Ferry wage forecasts 5.5% boost in Thailand
A forecast issued by Korn Ferry predicts that employees in Thailand will enjoy a salary increase of 5.5 per cent in 2019, similar to the previous year.
In the Korn Ferry 2019 Global Salary Forecast, Thailand is ranked fifth in terms of real-salary forecast – tied with Azerbaijan – at 3.9 per cent, among some 100 countries included in the study. The real-salary forecast in Ukraine, Turkey, India and Vietnam are expected to be higher than Thailand, at 5.9 per cent, 5.5 per cent, 5 per cent and 4.8 per cent, respectively.
As a region, Asia is expected to see the highest real-salary growth globally, with an expected inflation-adjusted real-salary increase at 2.6 per cent, but down from 2.8 per cent last year. There will be a 2 per cent increase for Eastern Europe, 0.7 per cent for Western Europe, 1.3 per cent increase for Latin America 0.9 per cent increase for Africa, 0.6 per cent increase for North America, 0.4 per cent for West Asia and 0.3 per cent increase for the Pacific region.
The Thai economy reached its strongest pace in 2018 since 2012 with GDP growth of 4.5 per cent, and had resulted in a low unemployment rate of 0.9 per cent. While it is forecast that GDP for 2019 will drop to 4.3 per cent, the Korn forecast predicts that at the individual level, the salary increase will remain at 5.5 per cent (no change from last year). However, the rising inflation (1.6 per cent) will drive real-salaries down to 3.9 per cent, from 4.5 per cent in 2018.
Mana Lohatepanont, managing director of Korn Ferry Thailand, said: “The flat-line salary increase can be attributed to lower forecasted GDP growth. Businesses are adopting a more conservative stance for 2019, with the looming signs of global economic slowdown, impact of potential trade war, rising interest rates and the general election. As organisations embark on business transformation and seek new capabilities, they need to manage and balance the cost of new skills and talent acquisition while maintaining the existing workforce.”
Korn Ferry pay experts recommend taking a holistic approach when determining pay. “While inflation indices are a solid benchmark for reviewing market trends in pay, we recommend that companies take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and trading conditions,” said Benjamin Frost of Korn Ferry. “Compensation programmes need to be regularly reviewed to make sure they align with changing business and market conditions.”
Bob Wesselkamper, Korn Ferry head of rewards, said: “With inflation rising in most parts of the world, we’re seeing a cut in real-salary increases across the globe. The percentage of salary increase or decrease will vary by role, industry, country and region, but one thing is clear, on average, employees are not seeing the same real-salary growth they did even one year ago.”