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India to see highest salary hikes in APac

April 07, 2009 15:45 IST
India is expected to see the highest salary increases among nations in the Asia-Pacific region, of around 10.8 per cent this year, due to the huge demand for talent in the country, despite the global economic crisis severely impacting overall wage increments in the region, a study says.

According to the Salary Trends survey by global HR consultancy ECA International, pay hikes in the Asia-Pacific region are expected to average at 4.8 per cent in 2009, a drop of 30 per cent from last year's 6.9 per cent increases.

The declining overall trend in pay hikes notwithstanding, some Asian countries, including India, Vietnam and Indonesia, may still see big increases in 2009, the study revealed.

"Wage increases in India are expected to be the highest at 10.8 per cent, followed by Vietnam (10.6 per cent), the only location in the region where rises are still higher than last year, and Indonesia (9 per cent)," the global HR consultancy ECA survey stated.

ECA regional director Asia, Lee Quane said, "There is still a huge demand for talent in India (that) is keeping pay increases high despite (the) current economic situation. While, in Vietnam and Indonesia persistently high levels of inflation are keeping increases up."

The survey stated that pay rises across Asia-Pacific are down 40 per cent from hikes predicted prior to the global economic crisis and almost one-third of firms surveyed are planning to put salary increases on hold. Further, salaries in Japan, Taiwan, Hong Kong and Singapore have recorded the biggest downward adjustments in 2008.

"Asia Pacific has been severely affected by the economic downturn and this is reflected in their planned salary reviews for 2009," Quane said.

Just over six months ago, companies operating in Japan had forecast salaries increases by a relatively healthy 2.8 per cent, but now half the companies surveyed have stated they would be freezing pay, the report stated.

ECA Salary Trends survey is conducted annually for over 50 countries, but it was re-run to monitor how changing economic conditions have affected companies' business plans since the study was first conducted in September.

Salary increases worldwide are expected to fall to around 4.7 per cent from last year's 6.2 per cent average as firms look towards cost cutting in response to the economic crisis.

In 2008, a range of factors like rising inflation, the competition for talent in many markets and healthy level of economic growth meant high salary hikes by firms, Quane said.

However, the economic upheaval since last September has prompted many firms to revise salary hikes significantly from previous predictions. Globally, firms revised their forecasts downward by more than a third on an average, he added.

Globally South American countries, Venezuela and Argentina, top the charts for expected salary increases, while India is at the third place.

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