Real wages tipped to grow 3.6% in 2020

Across Asia, real-wage salaries are expected to show the highest growth at 3.1%.

Real wages in Singapore are projected to grow 3.6% in 2020, more steeply than the 3% rise from last year, according to management consulting firm Korn Ferry. This is based on the city’s headline salary forecast of 4% and expected inflation rate of 0.4%.

Across Asia, real-wage salaries are expected to show the highest growth amongst regions at 3.1%, based on the predicted headline salary growth of 5.3% and inflation rate of 3.1%. China’s real wage forecast weakened to 2.9%, from 3.2% in 2019, whilst Japan’s improved to 0.6% from 0.1% from last year. In Hong Kong, real-wage growth is projected at 1.4%.

Globally, real wages are expected to climb 2.1%, based on the salary forecast of 4.9% and projected inflation rate of 2.8%. Real-wage salary rose 1% in 2019 worldwide.

“With the ongoing situation in Hong Kong and geo-political uncertainly in other parts of Asia, International and MNCs might re-ignite conversations around choosing Singapore as the main location for ASEAN and APAC Head Offices. This will keep continuous pressure on wage increases for Singapore market, more than anticipated because of economic slowdown and US-China trade war. We see this pressure building up for the middle to senior level managers, more than junior and entry level graduates,” said Kartikey Singh, head of rewards & benefits, Korn Ferry Singapore.

Farhan Mahmood, client director of Korn Ferry Digital in Singapore, also recommended organisations to focus on increasing the wages in critical roles and roles that are difficult to recruit, noting the findings in their survey that over a third struggled in hiring engineers as well as IT and sales workers.

“In addition, they should also consider spending a higher portion of the training and development budget on building a pipeline for these roles,” said Mahmood said.