Korn Ferry Hay: More pay rises in 2017

It will be yet another good year for rising salaries – and depending on continents and countries, the hikes could be considerable, says international executive firm's Korn Ferry’s Hay Group division. The consultants expect salaries to raise 4.4 per cent globally, and 2.3 per cent after adjusted for inflation. Every region of the world expects post-inflation growth; however, Asia is responsible for much of it. The region’s 4.3 per cent expected increase in real wages will be fuelled by gains in emerging markets.

Top – and flop: At country level, Vietnam may see the largest gains, with real wages expected to grow 7.2 per cent. It’s the opposite story in Argentina, where massive inflation is expected to reduce real wages by 12.5 per cent.

In the United States, real wages are expected to rise 1.9 per cent. Wages didn’t grow much after the financial crisis, but 2016 may have been a turning point. Average hourly earnings rose 2.9 per cent in 2016, the biggest gain since 2009.

Within Asia, the major real-wage growth is expected to come from emerging markets such as Vietnam, Thailand, Indonesia, and India. China’s real wages are expected to grow 4.0 per cent, much lower than the 6.7 per cent growth in 2016, in part due to the lower economic growth projections of the world’s second largest economy.

Despite the turmoil following the Brexit decision, United Kingdom is faring reasonably well. Real wages are to increase by 1.9 per cent in 2017, which is slightly higher than the western European average. Workers in France and Germany are forecast to see real-wage rises of 1.5 per cent and 2.2 per cent, respectively.

In eastern Europe, real wages are set to rise by 2.1 per cent, although citizens in some eastern European nations will see their money go far further than others. Real wages are expected to grow at least 4 per cent in smaller countries such as Latvia, Poland, and Romania. But the Russian Federation is expected to see real wages decline by 0.1 per cent in 2017, thanks to the country’s inflation rate of more than 7 per cent.

The study looks at the pay data of more than 20 million job holders in 25,000 organizations across more than 110 countries. It shows predicted 2017 salary increases as forecasted by global HR departments, and compares them to similar predictions made regarding 2016 wages a year ago.

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