BEIJING, Jan. 17 /Xinhua-PRNewswire/ -- Salaries in China are expected to rise 8% this year according to ECA International's Salary Trends Survey 2007/2008, above the 7.3% average forecast for the Asian region and well above the global average of 5.9%.
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ECA's Salary Trends Survey 2007/2008 contains information collected from multinational companies about actual salary increases for 2007 and predicted salary increases for 2008. Including data analysis in the context of economic conditions, the survey is used by international companies to monitor and benchmark company salary levels in local markets around the world.
Half of the top ten countries seeing the largest salary increases in this survey are in Asia. China's forecast for 2008 mirrors the strong 8% growth last year, putting it squarely in the list, joining The Philippines, India, Indonesia and Vietnam. Salary increases in the region are predicted to be over 25% higher than they were in 2005, and the region's salary increases are expected to overtake those of Eastern Europe for the first time as wage rises there are showing signs of stabilising.
Lee Quane, General Manager of ECA International, said, “The forecast for China is not unexpected, given the continued investment demand abroad and the domestic confidence around the 2008 Olympics. 8% is commensurate with the expectations for China's economic growth in the year.”
In Hong Kong, despite a strong economy and tight labour force, salary increases are expected to remain at 4% -- the same as in the previous two years. This is the second lowest rate in the region and 3.3 percentage points below the regional average.
Singapore's workers can expect salary increases of 5%. While this increase is below the regional average, this is up on last year's 4.5% increase -- reflecting a longstanding trend of rising salary increases in the country.
“While workers in China and Singapore receive lower salaries than their Hong Kong counterparts, the fact that they will be enjoying significantly higher salary increases means that the salary gap between these locations will continue to narrow,” explains Quane.
Regionally, India and Vietnam are expected to see the biggest increases when compared to last year's salary rises. In India the 14% salary rise is significantly up on last year's highs of 12.6%, while Vietnam's 10% prediction shows a notable increase on the 8.5% salary increments given in 2007.
Japan is expected to experience the region's lowest salary increases again this year. They are forecast to remain at 3% -- the same as in 2007.
Rising inflation
Within the region, real wage increases -- the difference between actual salary increases and inflation -- have shown a rising trend in recent years. However, unexpectedly fast inflation growth over the past three months prompted by significant rises in oil, food and accommodation costs, will counter-balance many of these high salary increases considerably. Most locations in Asia will therefore see lower rates of real wage increases than in 2007.
“This latest upswing in inflation, which has caught many people by surprise, will have an impact on real salary increases in 2008,” explains Lee Quane, General Manager of ECA International. “Inflation in China, for example, reached levels which have not been seen in recent years, prompting concern and action from the government reflected in recent measures to mitigate price rises in certain basic products. Elsewhere, employees in Asia's other major economies like Japan, Korea and Taiwan are likely to experience relatively subdued real income rises in comparison to previous years.
“The combination of lower real wage increases, together with a relatively tight labour market in many Asian economies, will become a headache for companies seeking to attract and retain talented staff in 2008.” Quane adds, “Companies will need to consider revising their forecast salary increases during 2008 or provide higher salary increases next year to make up for this year's relatively low increase in real incomes.”
Overview
Globally, Indian workers will again receive the largest salary increases in 2008, which are anticipated to be 14%. India is followed by Argentina (12.7%), Indonesia (11.3%) and Russia (11%). These high increments are mainly the result of fast economic growth and widespread skills shortages which are prompting companies to pay more for talent while keeping pace with the inevitable inflation that comes with economic development.
At the other end of the scale, companies are forecasting that workers in Switzerland, Japan, France Austria and Germany will be receiving the lowest salary increases next year.
Elsewhere, the UAE is expected to see the biggest improvement on last year, according to the survey, with salary increases forecast to be 8.7% -- a whole 1.7 percentage points above last year's rate. As this part of the world continues to experience robust growth, other countries in the region are also likely to record relatively high salary increases.
The biggest fall in salary increases since last year is forecast for Slovakia. Companies there are predicting wage increases of 5.5%, down 1.3% percentage points on last year. Although salary increases in Eastern Europe are showing signs of stabilising, wage growth remains relatively high there, with a regional average of 7%. Western Europe continues to be the region with the lowest expected salary increases, averaging 3.9% -- almost 50% lower than increases forecast for Asia.
In Latin America, companies in Argentina are forecasting salary increases to rise from 11.3% in 2007 to 12.7% in 2008. This is almost double the regional average of 6.4%.
Salary Increase Rankings
2008 2007
Predicted Actual
Salary Salary
Country Increase Increase
India 1 1
Argentina 2 4
Indonesia 3 2
Russia 4 3
Egypt 5 5
Vietnam 5 8
United Arab Emirates 7 12
Latvia 8 9
China 9 9
Philippines 9 9
Romania 9 7
Turkey 9 6
Korea Republic 13 15
South Africa 13 13
Thailand 15 15
Brazil 16 19
Hungary 17 17
Malaysia 17 17
Slovakia 19 14
Poland 20 20
Greece 21 23
Irish Republic 22 30
Mexico 22 20
Singapore 22 25
Czech Republic 25 20
Australia 26 25
Norway 27 30
Taiwan 27 27
Spain 29 28
Israel 30 24
Portugal 30 29
Canada 32 38
Hong Kong 32 30
Italy 32 30
New Zealand 32 30
United Kingdom 32 30
USA 32 30
Belgium 38 42
Finland 38 39
Denmark 40 42
Netherlands 40 30
Sweden 42 40
Germany 43 45
Austria 44 40
France 44 42
Japan 46 46
Switzerland 47 47
Notes to editors
Salary Trends Survey 2007/2008
The above information was taken from the Salary Trends Survey 2007/2008. The survey, which monitors actual salary increases for 2007 and predicted salary increases for 2008, is based on data collected from approximately 250 multinational companies in 47 countries, is now available to buy. Please contact ECA for further details.
About ECA International ( http://www.eca-international.com )
ECA International is the world's largest membership organisation for international human resources, serving a global network of over 4000 HR professionals in 71 countries.
The leading provider of online data, software solutions and advice for more than 1500 international companies, ECA's innovative approach has been providing cost-effective solutions to international HR management since 1971.
