India Emerges as Leader of Salary Growth Index in Asia: Korn Ferry

NYSE-listed Korn Ferry on Monday released The Korn Ferry Global Salary Forecast which reveals that the salary growth in India is expected to be highest in Asia at 9.2% in 2020. However, the inflation-adjustedreal-wagein Indiais anticipated being constant at 5%.

Rajiv Krishnan, Managing Director, Korn Ferry Advisory India said that India has posted a strong growth despite real wages taking a hit globally. With their current economic scenario and progressive reforms by the government, there is a sense of cautious optimism across sectors in India that continues to show high salary increments. They recommend organizations to re-examine their talent strategies and remuneration and reward policies, considering the rising cost of living, leading to marginal real wage increases, he said.

 

Roopank Chaudhary, Associate Client Partner – Korn Ferry India, said that India’s projected average salary increment has seen an average growth of 9.2% for 2020 and with low inflation, the real wage increased at 5.1%, which is amongst the highest globally.

 

He said that the salaries in India continue to grow but not evenly. What has changed is the play within – from tighter increment grids to stretched increment percentages and significant differentiation between high performers and average performers. In line with slower and lower increments across the board, companies will continue to differentiate their top performers, high potentials and critical talent sharply. Given the increasing cost pressures on the businesses, fixed salary sees a slow growth whereas high performers will continue to see steady growth in Total Remuneration including performance incentives (short and long term),” he said.

According to the forecast, salaries are predicted to grow at a rate of approximately4.9% globally in 2020. With a global inflation rate prediction of approximately 2.8%, the real-wage salary increase prediction at 2.1%.The highest real wage growth is expected in Asia, with salaries forecast to grow by 5.3% in 2020 and real-wage salaries are expected to be 3.1%, with an inflation rate of 2.2%.

 

Across Asian countries, Indonesia is forecasted to have a salary growth of 8.1%, whereas, Malaysia, China, and Korea are expected to have a salary growth of 5%, 6%, and 4.1% respectively. The lowest salary growth is expected in Japan and Taiwan at 2% and 3.9% respectively.

 

Forecast Highlights:

 

Slower Inflation Rate Boosts North American Real Wages Marginally

 

In North America, the average salary growth is predicted to be 2.8 percent in 2020, which is the same as last year. When adjusted for inflation, the real wage growth is expected to be 1.1 percent, up from 0.6 percent last year.

 

In the United States, an average 3 percent pay increase is predicted, which is the same as last year and the year before. Adjusted for the expected 1.6 percent inflation rate in 2020, the real wage increase is forecast to be 1.4 percent, up from last year’s 0.6 percent. Canadian workers will see salaries increase by 2.6 percent, which is the same as last year. With inflation predicted at 1.9 percent, the real-wage predicted increase is 0.7 percent, up from last year’s 0.6 percent

 

Eastern Europe Faring Better than Western Europe

 

Korn Ferry forecast suggests employees in Eastern Europe are set to see an average salary increase of 6.2 percent in 2020. Taking inflation into account, real wages are forecast to rise by 2.6 percent, which is up from 2.0 percent last year. In Western Europe, workers are expected to see an average increase of 2.5 percent, and inflation-adjusted real wage increases of 1.2 percent, which is up from 0.7 percent real-wage growth of last year.

 

Wages are predicted to increase by 2.5 percent in the United Kingdom. Combined with a 2.1 percent inflation rate, real wages are expected to increase by 0.4 percent. That is very close to last year’s real-wage increase of 0.6 percent. Employees in two of Europe’s largest economies, France and Germany, are forecast to see real wage rises of 0.6 percent and 1.4 percent respectively.