BANGKOK, THAILAND  - 8 February 2024 - Aon plc (NYSE: AON), a leading global professional services firm, has revealed that salaries in Thailand are expected to increase in 2024 according to the firm's 2023 Salary Increase and Turnover Study.

While salaries in Thailand are expected to increase by 4.9 percent, salaries in Singapore and Malaysia are expected to stay flat at 4.0 percent and 5.0 percent respectively. The survey found the median salary is expected to increase 6.5 percent for Indonesia, 5.5 percent for Philippines and 8.0 percent for Vietnam in 2024.

Although slightly higher, the projected increase in salaries in Thailand continues to defy economic slowdown concerns. The attrition rates across Thailand dropped in 2023 to 14.0 compared to 15.4 percent in 2022 yet continue to remain in the double digits as a consequence of ever-changing talent strategies and ongoing supply and demand challenges. Attrition rates were the highest in Philippines at 17.5 percent and lowest in Vietnam at 13.8 percent.

"As companies navigate new forms of volatility, salary-increase planning has become challenging across the region. A reassessment of compensation strategies based on the latest data and analytics shows that firms must stay competitive," said Rahul Chawla, partner and head of Talent Solutions for Aon in southeast Asia. "By leveraging data from their own organisations as well as the market, companies can make better informed decisions enabling them to not only weather the challenges of an uncertain economic climate but to thrive in an evolving workforce landscape."

The report further revealed that businesses in southeast Asia are cautiously optimistic about hiring, with 40 percent of the companies reporting no changes to their recruitment numbers, and 40 percent of companies having hiring restrictions. Despite an increase in layoffs earlier in the year, Aon's data shows headcount numbers across industries are still higher than pre-pandemic levels, with layoffs mainly occurring in the non-core/expansion areas of the business, while they continue to hire for other business lines.

New hire premiums are averaging between 5.6 percent and 13.3 percent, with firms becoming more cautious with compensation spends as they streamline budgets, enhance cost efficiency and re-evaluate compensation strategy. This contrasts with 2022, when southeast Asia saw a hiring boom and new hire premiums averaged between 14.7 percent and 23.6 percent. In Thailand, increasing competition for talent has driven premiums across levels for roles in product management at 98 percent, 64 percent for system design roles, 44.8 percent for alliance partnership, 37.9 percent in test and validation and 30.1 percent for sales and telemarketing roles.

Sumate Kurasirikul, senior consultant for Talent Solutions in Thailand at Aon said, "Aon's 2023 Global Risk Management Survey shows that business leaders consider 'failure to attract and retain talent' as one of the top 10 risks businesses' are facing, highlighting the importance leaders are placing on people risk. Compensation market data is critical in helping businesses understand whether their reward offerings are competitive and shape important decisions to attract and retain sought-after skills and therefore mitigating people risk. With the economy slowing, however, increasing salaries may be unsustainable for firms as they look to maintain profits and curtail people costs among other expenses. By having a holistic rewards strategy in place, based on data and analytics, organisations will be in a better position to compete for the talent they need."

Looking ahead to 2024, salaries in southeast Asia continue to vary across industries, and from one country to the next. The retail industry continues to have the highest budgeted salary increases at 6.1 percent, followed by technology at 6.0 percent, life sciences and medical devices industry at 5.9 percent, manufacturing at 5.8 percent and financial services at 4.8 percent.

The manufacturing sector is expected to have the highest increase in Thailand (8.0 percent), Malaysia (13.7 percent) and Philippines (14.5 percent) compared to the technology industry that had the highest year on year salary increase across industries in Singapore (4.5 percent), Indonesia (10.2 percent) and Vietnam (10.9 percent).

Across southeast Asia – Malaysia, Philippines and Singapore - more than half of the roles have had salary increases outrun inflation. Singapore and Philippines had 71.7 percent of salary increases outrun inflation and Malaysia had 56.4 percent. However, for Indonesia, Vietnam and Thailand, on average, 70 percent of salary increases lagged inflation. For 67 percent of firms in southeast Asia, inflationary pressures are included as part of their pay policy considerations when reviewing salary increases.

These insights are based on data gathered in the third quarter of 2023 from 950 companies across Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. Learn more about the 2023 Salary Increase and Turnover study here.

Hashtag: #Aon