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Salaries to rise in India, Vietnam, Hong Kong and Singapore

2017 is forecast to be an excellent year for Asian salaries and hiring practices, according to a new report in India’s Economic Times.

According to Mercer’s 2016 India Total Remuneration Survey, salaries are set to grow by an impressive 10% across industries and sectors in India. But that’s not all — some 54% of respondents also reported that they are expecting to up their hiring and expand their teams in the new year.

Furthermore, the study found that 70% of companies in the hi-tech and shared services industries are looking to expand their teams. And the good news travels further than just India, as Vietnam, Hong Kong and Singapore are all set to see their salaries rise, too.

The study, which surveyed 768 organisations in a cross-section of industries, examined hiring trends and salary expectations for 2017. The growth rate for salaries was projected to increase by an average of 10-11%, although this figure was higher for highly skilled or specialised positions.

“Over the years, salary increase differentiation across industries has narrowed down. Over the last three years, salary increases have stabilised around 10%. We also note that the overall increases including promotions and market corrections, are pegged at 10.8%,” commented Ruchika Pal, Principal & India TRS Product Leader at Mercer.

Meanwhile, real wage growth has also risen steadily over the past five years due to increasing inflation. “Against the backdrop of increased demand for talent and high attrition rates, the majority of companies use inflation rate as the basic minimum level to peg their salary increases and engage their employees. The increase in real wages reflects the acute talent demand/supply mismatch,” Pal explained.

Actual salary growth in 2016 was higher than predicted, as the rate of growth was 17.1%, compared with the forecast 15.4%. Bonuses are also expected to see similar improvements, with the consumer industry seeing the highest pay outs.

However, in spite of India’s increasing wages, the lingering skills gap continues to hinder progress and hiring intentions. While a predicted one in two companies are planning to increase their headcount, those in shared services, hi-tech and life sciences are still struggling to fill their vacancies.

Shanthi Naresh, India Business Leader-Talent at Mercer, commented that “Largely, organisations are optimistic about delivering business results in 2016. Based on our follow-up spot survey, we note that companies are expecting to see a 2-5% increase in business results, over 2015. Companies in India are bullish about growth and will continue to hire and invest in talent.”

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By David Gee Published: December 22, 2016

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