Asian workers are expected to enjoy the highest pay hikes in the world in 2007, thanks to robust economic growth, talent shortage and lower inflation, a survey showed on 6 February.
Real wage increases, which represent workers’ annual salary rises after taking inflation into account, are expected to climb an average 3.6% in Asia this year, a 50 % jump from 2.4 % in 2006, according to a survey by human resources firm ECA International.
Robust economic growth has turned Asia into one of the fastest-growing millionaires club in the world as private bankers flock to the region, and as banks such as Merrill Lynch/Capgemini bet that the wealth of Asian millionaires may hit $10.6 trillion in 2010.
“There is too much money chasing after too few managers, so companies have to throw more money at their managers to get them to stay,” Lee Quane, ECA’s Hong Kong-based general manager, told Reuters.
Salaries for Asian workers may get a bigger boost because Asian economies are growing faster than the supply of talent— especially for senior managers—and because falling inflation rates are lifting purchasing power, Quane said.
According to the survey, which compares 45 countries, workers in India are set to enjoy the sharpest jump in real wages across the globe this year at 7 %.Workers in Indonesia and China come in a close second and third, with real wage increases forecasted at about 6 %.In comparison, salaries for workers in Slovakia may grow by 3.5% in real terms this year —the fastest expected pace of growth outside Asia — while American workers may only see their wages inch up 1.1 %.“In India, companies are growing, the gross domestic product is growing, so there stands good reason that people should be earning more,” Quane said.He added that workers in India’s business process outsourcing and technology sectors, which have the highest labour turnovers, were likely to see the sharpest wage increases.Vietnamese workers, on the other hand, may see the lowest pace of real wage growth in Asia in 2007 due to high inflation rate.The world’s top 10 countries with the highest forecasted ‘real’ wage increases in 2007 are India,Indonesia, China,Philippines,Thailand, Slovakia,South Korea,Malaysia,Egypt,Russia, in that order.