SINGAPORE (Dec 14): Increases in salary budgets across 21 markets in Asia Pacific are expected to average at 6.1% for 2018, up from 5.9% in 2017, according to Willis Towers Watson’s 2017 Asia Pacific Salary Budget Planning Report.

The salary increases projected for next year reflect expectations for economic growth in the region that’s more steady than steamy, with the pickup arresting two years of slowdown.

Although the survey looks at salary budget forecasts, Willis Towers Watson research also shows that actual budgets more often come in lower than projected.

The rate of increase in salary budgets is expected to rise in nine Asia Pacific markets, and remain stable in 12.

South Asia will lead the way for salary budget increases in 2018.

India is expected to see a 10% increase on average, but taking into account India’s inflation rate, the increases in real terms stood at 5.3%, down from 5.6% in 2017.

Sambhav Rakyan, Willis Towers Watson’s data services practice leader for Asia Pacific, says, “Yet, given the decreasing pattern in the year-on-year salary increases, Indian employees could very well see a single digit salary increase in 2018 for the first time since 2011. That would be slightly below our forecast.”

India, along with Vietnam (5.7%) and China (5.1%), will see the highest real salary budget increases in the region.

Indonesia is also set to stand out, posting the largest decline in real increases in 2018 – up just 2.8% compared to 3.9% in 2017.

Meanwhile, the developed markets of Hong Kong, Singapore, Australia, Japan and New Zealand will see among the lowest overall increases.

Australia and New Zealand’s salary increases are both forecast at 3.0% - and at 1.1% and 1.2% respectively in real terms. Japan’s will remain the lowest at 2.3% on average, or 1.7% in real terms.

Salary increases in Hong Kong and Singapore are both expected to average at 4.0%, but accounting for inflation, will lower the average to 1.7% and 2.4% respectively.

The results of the survey hence implied that the pressure points in terms of scarcity of talent is evident.

Industry wise, the pharmaceutical and health sciences sector, as well as the high-tech sector are expected to see salary budgets increase 6.1% in 2018, the highest of the industry sectors covered, while the leisure and hospitality sector will see the lowest increases at about 3.9%.