Pay increase tipped to edge higher at 5.5 per cent in 2018
THAI salaries are projected to rise 5.5 per cent in 2018, slightly higher than the average 5.2 per cent increase paid this year, with likely bonuses of between 1.8 and 5.5 months’ pay based on 2017 salaries, according to the third quarter Salary Budget Planning Report by advisory company Willis Towers Watson.
The survey was conducted globally in July. More than 4,000 sets of responses were received in Asia Pacific, with 132 Thai-based companies participating.
When compared with other Asian markets, Thai salary increases rank around the middle of the group. For pay rises in 2018, India (10 per cent), Sri Lanka (8.6 per cent) and Indonesia (8.5 per cent) will lead the way in the region, while Japan (2.3 per cent) will see the smallest increases.
In Thailand, salary increase were recorded across all sectors over three years (2016-2018), a majority of the sectors shares similar trends. Construction had the smallest rise at 4 per cent in 2017 and is projected to continue with the lowest rate of increase at 5 per cent in 2018. Life Insurance is showing a decreasing pattern in the year-on-year figures; however, it is still forecasted to meet the average increase at 5.5 per cent.
According to Willis Towers Watson’s 2017 General Industry Total Compensation Survey, Thailand’s overall turnover rate in 2017 reached 12 per cent, the same as the previous year and also lower than the overall voluntary attrition rate in APAC (15 per cent). Industries experiencing the highest turnover are electronics manufacturing (18 per cent) and life insurance (16 per cent). The lowest turnover is in high tech (11 per cent) and asset management (10 per cent).
The survey was conducted in June. It covers 245 companies representing various industries in Thailand. The survey aims to help companies validate their salary competitiveness, support their recruitment initiatives and make informed decisions about total reward programs for their employees.
The top three most frequently stated reasons for employee resignations are better pay, career advancement opportunities and relationships with supervisors. “Companies in Thailand acknowledged these three factors well, however it takes time to build fundamental HR programs to improve them,” said Pichpajee Saichuae, managing director of Willis Towers Watson Thailand. “Quick win solutions can be implemented to make sure that we differentiate pay, promote the right talent and most importantly, we equip our line managers with HR knowledge and tools to enable them to be good people managers,” Pichpajee said.
Differ by industry
In terms of variable bonuses in 2017, the results differ by industry, ranging widely from 1.8 to 5.5 months of base salary. Electronics manufacturing and general insurance have the lowest variable bonus at 1.8 months, less than the overall industries (2.4 months). Asset management offers the highest bonus pay-outs with an average of 5.5 months of base salary.
“Organisations need to understand that monetary rewards is just one of the components to help the firms attract and retain their key talents,” said Tony Kantapasara, talent and reward business leader at Willis Towers Watson Thailand. “Understanding what drives our employees’ engagement, and creating the compelling employee value proposition (EVP) that is tailored to each firm’s talents are no less important.”
Fresh graduates with a bachelor’s degree can command starting salaries of Bt15,000 while those with masters can request for Bt20,500 minimum. Top entry-level salaries for new graduates can be found in engineering, information technology, legal, human resources and accounting and finance.
Job functions that are difficult to recruit are sales and business development (46.5 per cent), information technology (28.3 per cent) and marketing (25.3 per cent), respectively. While job functions that organisations have difficulty in retaining employees are sales and business development (52 per cent), followed by customer service/technical support (24 per cent), and information technology and engineering (16 per cent).
Kantapasara said: “In today’s competitive race to attract and retain skilled talents, it is critical for the firms to understand industries’ trends, and get reflections from the market of what matters to their workforce. This will help them keep their talents and maintain their competitive edge. A reliable source of data will certainly help organisations make informed decisions about their people.”
