A forecast issued by Korn Ferry (NYSE: KFY) predicts that employees in Thailand will enjoy a salary increase of 5.5 percent in 2019, similar to the previous year.
In the Korn Ferry 2019 Global Salary Forecast, Thailand is ranked fifth in terms of real-salary forecast – tied with Azerbaijan – at 3.9 percent, among some 100 countries included in the study. The real-salary forecast in Ukraine, Turkey, India and Vietnam are expected to be higher than Thailand, at 5.9 percent, 5.5 percent, 5.0 percent and 4.8 percent, respectively.
As a region, Asia is expected to see the highest real-salary growth globally, with an expected inflation-adjusted real-salary increase at 2.6 percent, but down from 2.8 percent last year. There will be a 2.0 percent increase for Eastern Europe, 0.7 percent for Western Europe, 1.3 percent increase for Latin America, 0.9 percent increase for Africa, 0.6 percent increase for North America, 0.4 percent for the Middle East and 0.3 percent increase for the Pacific region.
The Thai economy reached its strongest pace in 2018 since 2012 with a GDP growth of 4.5 percent, and had resulted in a low unemployment rate of 0.9 percent. While it is forecasted that GDP for 2019 will drop to 4.3 percent, the Korn Ferry 2019 Global Salary Forecast predicts that at the individual level,the salary increase will remain at 5.5 percent (no change from last year). However, the rising inflation (1.6 percent) will drive real-salary down to 3.9 percent, from 4.5 percent in 2018.
Dr. Mana Lohatepanont, Managing Director, Korn Ferry Thailand, explains, “The flat-line salary increase can be attributed to lower forecasted GDP growth. Local businesses are adopting a more conservative stance for 2019, with the looming signs of global economic slowdown, impact of potential trade war, rising interest rates and the upcoming general election. As organizations embark on business transformation and seek new capabilities, they need to manage and balance the cost of new skills/talent acquisition while maintaining existing workforce.”
Korn Ferry pay experts recommend taking a holistic approach when determining pay. “While inflation indices are a solid benchmark for reviewing market trends in pay, we recommend that companies take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and local trading conditions,” said Benjamin Frost, Korn Ferry’s Global General Manager – Pay. “Compensation programs need to be regularly reviewed to make sure they align with changing business and market conditions.”
These views are reinforced by Bob Wesselkamper, Korn Ferry Global Head of Rewards and Benefits Solutions, who says, “With inflation rising in most parts of the world, we’re seeing a cut in real-salary increases across the globe. The percentage of salary increase or decrease will vary by role, industry, country and region, but one thing is clear, on average, employees are not seeing the same real-salary growth they did even one year ago.”