World – Most employees expect to see smaller real wage increases

By memberservices@staffingindustry.com (Danny Romero)

Employees around the world are expected to see real wage increases of an average of 1.5%, according to a forecast by the Hay Group division of Korn Ferry. The forecast is a downgrade from 2017’s prediction of 2.3% and 2016’s prediction of 2.5%.

“With inflation rising in most parts of the world, we’re seeing a cut in real wage increases across the globe,” Bob Wesselkamper, Korn Ferry Global Head of Rewards and Benefits Solutions, said. “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 pay growth they did even one year ago.”

Wages in the Australasia region are forecast to grow by 2.5%, which is an increase of 0.7% in real wages when adjusted for inflation. Australia will see a 2.5% top-line growth, a 2.1% inflation rate, and a 0.4% real wage increase. In New Zealand, a 2.5% salary increase is forecast, with 1.5% inflation, for a 1% real salary increase.

In Asia, salaries are forecast to increase by 5.4%, down from 6.1% last year. Inflation-adjusted real wage increases are expected to be 2.8%, the highest globally, but down from 4.3% last year.

Meanwhile, employees in Eastern Europe are set to see an average salary increase of 6% in 2018. However, after taking inflation into account, real wages will rise by 1.4% which is down from 2.1% last year. In Western Europe, workers are expected to see lower wage increases, with an average increase of 2.3%, and inflation-adjusted real wage increases of 0.9%.

With the continued uncertainty following the Brexit decision, wages in the United Kingdom are up 2% Combined with a 2.5% inflation rate, real wages are expected to decrease by -0.5%. This is in contrast to 2017, when inflation-adjusted wages in the U.K. were up 1.9%. Employees in two of Europe’s largest economies, France and Germany, are forecasted to see real wage rises of 0.7% and 0.8% respectively.

“Slower economic growth in mature economies keeps a check on pay raises,” Wesselkamper said. “In emerging economies, upskilling workers is crucial for companies to maintain a competitive advantage – and those skilled employees can expect to see wages rise as talent shortages in certain regions drive salaries upward.”

For the full list of countries, click here.

Source:: World – Most employees expect to see smaller real wage increases