Hong Kong: A quarter of the world’s companies, and 40% in the US, plan to freeze salaries this year, but employees in South America and India can look forward to robust rises, a global survey shows on Tuesday.
Employees in Japan, Lithuania and Ireland will see the lowest pay rises, according to the survey of 53 countries by London-based research company ECA International. In recession-hit Japan, half of companies plan to freeze salaries.
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Globally, average salaries should increase 4.7% this year, down from a 6.2% rise in 2008, the survey shows.
“The economic upheaval since last September has prompted many firms to revise salary increases significantly from previous predictions,” said Lee Quane, ECA’s Asia director.
“Our results show that, globally, companies have revised their forecasts down, on average, by more than a third.”
Companies in Venezuela, in contrast, are set to hand out the biggest pay rises this year, averaging 24% and up from 22% last year, followed by Argentina where pay is set to increase by 12%. Pay hikes in Brazil and Chile meanwhile will be higher than last year.
While pay in India is rising because of a talent shortage, by an expected 10.8% this year, pay rises in Latin America, Vietnam and Indonesia are being spurred partly by rising inflation.
In the US, pay is expected to rise by just 2.8%, down from forecasts for a 4% rise in a similar survey taken by ECA in September, and 40% of firms will freeze pay.
Salaries across the Asia-Pacific are likely to rise 4.8%, compared with a 6.9% rise last year, but a third of companies in the region will freeze salaries. Salaries in mainland China will hold up because of a talent shortage whereas pay in Japan, Singapore, Taiwan and China’s special autonomous region of Hong Kong, which are all in recession, will be marginal if at all.
Salaries in Singapore and Hong Kong will increase by 2%, the same as in Western Europe, while in Eastern Europe they will increase by just under 5%. However, 29% of European companies plan to freeze salaries this year.
Graphics by Sandeep Bhatnagar / Mint