MindIT

Korn Ferry (NYSE: KFY) released The Korn Ferry Global Salary Forecast which reveals that the salary growth in India is expected to be highest in Asia at 9.2 per cent in 2020. However, the inflation-adjusted real-wage in India is anticipated to be constant at 5 per cent.

Navnit Singh, Chairman & Regional Managing Director, Korn Ferry India said: “India has posted a strong growth despite real wages taking a hit globally. With current economic scenario and progressive reforms by the government, there is a sense of cautious optimism across sectors in India that continues to show high salary increments. We recommend organisations to re-examine their talent strategies and remuneration and reward policies, considering the rising cost of living, leading to a marginal real wage increase.”

India’s projected average salary increment has seen an average growth of 9.2 per cent for 2020 and with low inflation, the real wage increased at 5.1 per cent, which is amongst the highest globally.

The salaries in India continue to grow but not evenly. What has changed is the play within – from tighter increment grids to stretched increment percentages and significant differentiation between high performers and average performers. In line with slower and lower increments across the board, companies will continue to differentiate their top performers, high potentials and critical talent sharply. Given the increasing cost pressures on the businesses, fixed salary sees a slow growth whereas high performers will continue to see a steady growth in total remuneration including performance incentives (short and long term).

According to the forecast, salaries are predicted to grow at a rate of approximately 4.9 per cent globally in 2020. With a global inflation rate prediction of approximately 2.8 per cent, the real-wage salary increase prediction at 2.1 per cent. The highest real wage growth is expected in Asia, with salaries forecast to grow by 5.3 per cent in 2020 and real-wage salaries are expected to be 3.1 per cent, with an inflation rate of 2.2 per cent.

Across Asian countries, Indonesia is forecasted to have a salary growth of 8.1 per cent, whereas, Malaysia, China and Korea is expected to have a salary growth of 5 per cent, 6 per cent and 4.1 per cent respectively. The lowest salary growth is expected in Japan and Taiwan at 2 per cent and 3.9 per cent respectively.

Highlights:

• In North America, the average salary growth is predicted to be 2.8 per cent in 2020, which is the same as last year. When adjusted for inflation, the real-wage growth is expected to be 1.1 per cent, up from 0.6 per cent last year.
• According to the Korn Ferry forecast, employees in Eastern Europe are set to see an average salary increase of 6.2 per cent in 2020. After taking inflation into account, real wages are forecast to rise by 2.6 per cent, which is up from 2 per cent last year. In Western Europe, workers are expected to see an average increase of 2.5 per cent, and inflation-adjusted real wage increases of 1.2 per cent. That is up from 0.7 per cent real-wage growth of last year.
• Wages are predicted to increase 2.5 per cent in the United Kingdom. Combined with a 2.1 per cent inflation rate, real wages are expected to increase by 0.4 per cent. That is very close to last year’s real-wage increase of 0.6 per cent. Employees in two of Europe’s largest economies, France and Germany, are forecast to see real-wage rises of 0.6 per cent and 1.4 per cent respectively.
• Top-line salaries in Africa are predicted to increase by 7.9 per cent in 2020, and the real-wage increase is predicted to be 2.3 per cent. That’s up from 0.9 per cent last year. In Egypt, salaries are expected to increase by 13.5 per cent, and with a 6.9 per cent inflation rate, employees will see a 6.6 per cent real-wage increase. That’s up from last year’s 0.6 per cent real-wage increase.

“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 Global General Manager, Pay.