Salary hike to stay flat this 2024 for S’porean workers: Aon

40% of Southeast Asian companies are carefully optimistic about hiring.

Salary increase remains lukewarm for workers this 2024 at 4.0% despite expectations of slower economic growth with employers grappling with talent attrition.

Aon’s 2023 Salary Increase and Turnover Study showed that Singapore and Malaysia are expected to remain stagnant in 2024. 

In contrast, median salary increases are projected at 6.5% for Indonesia, 5.5% for the Philippines, 4.9% for Thailand, and 8.0% for Vietnam. 

The study reveals a rise in attrition rates in Malaysia, reaching 16.2% in 2023, driven by evolving talent strategies and the persistent talent supply-demand gap. The Philippines reports the highest attrition at 17.5%, while Vietnam has the lowest at 13.8%. 

The report suggests cautious optimism about hiring in Southeast Asia, with 40% of companies reporting no changes to recruitment numbers, and 40% imposing hiring restrictions.

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Companies are more cautious with compensation spending, with new hire premiums averaging between 5.6% and 13.3%, contrasting the 2022 hiring boom when premiums ranged from 14.7% to 23.6%. 

Looking ahead to 2024, salary variations persist across industries in Malaysia, with the retail industry leading at 5.2%, followed by technology, life sciences, medical devices, and manufacturing at 5.0%, and financial services at 4.5%.

In Southeast Asia, over half of roles in Singapore, Malaysia, and the Philippines see salary increases outpacing inflation, with 71.7% in Singapore and the Philippines and 56.4% in Malaysia. 

However, in Indonesia, Vietnam, and Thailand, an average of 70% of salary increases lag behind inflation. About 67% of firms in Southeast Asia consider inflationary pressures when reviewing salary increases.

The insights are based on data collected in Q3 2023 from 950 companies across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.