Covid-19 pandemic has not yet reached its conclusion, but ongoing infection and fatality rates appear to be better controlled due to vaccination programs commenced in multiple jurisdictions around APAC regions. Along with this joyful news, however, as impactful as the pandemic was in 2020 and will continue to be in 2021, there are a number of other forces that will shape the business environment. These forces include macroeconomic development (low-interest rates and fiscal policy support, geopolitical tensions and rising national sentiment, accelerated uptake of technology, cost pressures, and the consequential impact of talent models.
In terms of cost and economic pressure, 2020 has foreseen companies and employees alike to slow down their operations, reduce compensation packages, and measure hiring. In fact, the Covid-19 outbreak has resulted in an economic downturn globally, disrupting the recruitment market and slowing down pay rise budgets.
As 2021 begins, companies have taken the opportunity to reflect and note that disaster has been averted. But no one could predict exactly whether another annus horribilis will further happen in the upcoming months or a glimmer of hope of economic tranquillity. The year ahead is a step into uncertainty. Whilst a full recovery is not yet expected, there is cause for tentative optimism in 2021.
2021 Hays Asia Salary Guide disclosed its findings on observations of 9000+ working professionals and employers across Asia, covering China, Hong Kong, Japan, Malaysia, and Singapore.
According to Hays, China and Singapore see the most positive results regarding economic improvements in 2021. Companies in China were least impacted by the pandemic which saw the highest proportion answering ‘neutral’ in all metrics. China also had the most companies with positively impacted business development opportunities, growth, and employee morale. Meanwhile, in Singapore, the most positive results were seen in productivity, revenue, and innovation. Malaysia, Hong Kong, and Japan saw mixed results in their positive changes.
Despite positive changes in some regions, salaries clearly have been impacted. There are areas where salaries levels held up but overall, salaries levels are down and bonuses are much reduced. The sentiment remains weak for 2021 due to uncertainty in some sectors that might not rebound faster than the others. Hays mentioned that these regions (China, Hong Kong, Jepang, Malaysia, Singapore) should anticipate little real salary growth in 2021.
From the overall calculation, the general results of salary change in 2021 are 37 percent of employees should expect no change in their payment and 4 percent should see a decreased salary. More than a quarter (29 percent) of employees will see an increment up to 3 percent.
For bonus remuneration, more than half of employees (55 percent) will offer bonuses as part of the overall remuneration package. 18 percent of employees will offer bonuses but for lower amounts than previously, followed by 15 percent employers who cited no bonus, 7 percent employers said yes but for less staff than previously, and 5 percent employers do not offer bonuses as part of a remuneration package.
Even though the salary and bonus increments are not significant, with the economic sentiment growing positive in Asia and forecast is being upgraded, pleasant surprises rather than nasty shocks might be more likely towards the end of the year and beyond, said Richard Eardley, Managing Director of Hays Asia. There is still hope to see 2021 as upbeat where the regions can regroup, restructure, transform, and look to the future beyond.
In India, a Michael Page survey showed that although the country registered its first economic recession for nearly 30 years, more than 60 percent of employers intend to increase salaries in 2021. Only 10 percent of employers said no to salary increments and 30 percent of employers still have not decided whether to increase employee’s payment or not.
Among all sectors in India, healthcare and life sciences will see the highest salary increment by 8 percent, followed closely by fast-moving consumer goods, e-commerce/Internet, technology, banking and financial services, professional service, and retail. For sectors on transport and distribution, property and construction, natural resources and energy, industrial and manufacturing, they will see an increment of 6 percent or less.
Furthermore, more than half (55 percent) of Indian companies also intend to give out bonus payments. Out of these companies, 44 percent would give out more than one month’s worth of bonus, while less than half (46 percent) would give a bonus worth one-month salary and 10 percent will give a bonus less than one month.
Indonesia remains optimistic about recruitment and hiring in 2021. The country is expected to see genuine recovery in the second half of the year, particularly as Indonesia’s manufacturing industry and infrastructure projects regain some momentum.
As for the salary projection, Michel Page Indonesia disclosed that less than half of employers (48 percent) intend to give a salary increase and 39 percent of employers are undecided. Healthcare and life sciences sector is still the first rank in its salary increment with a 15.5 percent increase, followed by fast-moving consumer goods, legal, industrial and manufacturing, and e-commerce/Internet with more than 6 percent salary increase respectively. Other sectors, including banking and financial services, natural resources and energy, professional services, property and construction, retail, technology, and transport and distribution, might see less than a 6 percent increase in employee pay.
When it comes to bonuses, 42 percent of companies surveyed said they intend to give out more than one month’s worth of bonus for employees.