- Budgeted salary increases in Singapore and Thailand projected to lag other countries in the region
- Businesses likely to maintain or increase overall workforce numbers
SINGAPORE - Media OutReach Newswire - 12 November 2024 - Aon plc (NYSE: AON), a leading global professional services firm, has announced the findings from its 2024 Salary Increase and Turnover Study for southeast Asia (SEA). The study, conducted from July to September 2024, analysed the salary adjustments and turnover rates of more than 950 companies across Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.
The survey found that across the entire region, the budgeted salary increases are expected to be higher in 2025 than 2024. Salary increases are projected at 6.7 percent for Vietnam, 6.3 percent for Indonesia, 5.8 percent for Philippines, 5.0 percent for Malaysia, 4.7 percent for Thailand and 4.4 percent for Singapore.
Salary increments will also vary across industries in SEA with technology and manufacturing budgeting for the highest salary increases at 5.8 percent. These are followed by retail; consulting, business and community services; and life sciences and medical devices all at 5.4 percent. With energy, financial services and transportation at the lower end at 4.9 percent, 4.8 percent and 4.1 percent, respectively.
When overlaid with geography, the technology industry is expected to have the highest increase in Vietnam (7.5 percent) and Thailand (5.2 percent), the manufacturing industry in Indonesia (6.9 percent) and Philippines (6.1 percent) and the consulting, business and community services sector in Malaysia (5.9 percent) and Singapore (5.7 percent).
| Country | Actual Salary Increase 2023 % | Actual Salary Increase 2024 % | Budgeted Salary Increase 2025 % | Attrition in 2022 % | Attrition in 2023 % | Attrition in 2024 % |
| Indonesia | 6.0 | 5.7 | 6.3 | 15.9 | 15.1 | 20.8 |
| Malaysia | 5.0 | 4.9 | 5.0 | 14.9 | 16.2 | 15.9 |
| Philippines | 5.2 | 5.4 | 5.8 | 18 | 17.5 | 19.1 |
| Singapore | 4.0 | 4.2 | 4.4 | 19.6 | 16.5 | 16.7 |
| Thailand | 4.7 | 4.4 | 4.7 | 15.4 | 14.0 | 16.6 |
| Vietnam | 7.5 | 6.4 | 6.7 | 15.2 | 13.8 | 15.5 |
Rahul Chawla, partner and head of Talent Solutions for southeast Asia at Aon, said, “According to Aon’s Global Risk Management Survey, failure to attract and retain talent now ranks as the fourth highest risk on the minds of organisations – two years ago this was not even among the top ten risks. Employers today are in an unenviable situation of balancing the rising cost of compensation with the distinct challenge of attracting and retaining top talent. The talent market is dynamic, providing agile firms the opportunity to be proactive in their talent strategies with the help of total reward levers. To be a first mover in this environment, firms need to use real-time data and predictive analytics to understand broader market trends including what roles are in demand, what skills are fetching premiums and where cost-saving opportunities exist.”
The study further revealed that 64 percent of companies report challenges in hiring or retaining employees, with one in three firms looking to increase headcount between five and 20 percent. Despite these challenges, organisations are maintaining or increasing overall workforce numbers slightly, by streamlining management layers and focusing on hiring individual contributors to strengthen their teams.
Attrition rate also varies across industries, with the consulting, business and community services industry having the highest rate at 23 percent, followed by life sciences and medical devices industry at 18.4 percent, energy at 18.0 percent, financial services at 17.8 percent, manufacturing at 16.5 percent, technology at 15.1 percent and the retail industry at 11.2 percent.
The consulting, business and community services industry also had a much higher involuntary turnover rate at 8.9 percent followed by manufacturing at 4.8 percent, financial services at 4.2 percent, technology at 4.0 percent, life sciences and medical devices industry at 3.4 percent and retail at 3.2 percent. This contrasts with 2023 where the retail industry had the highest involuntary turnover at 9.5 percent while the consulting, business and community services industry and financial services were the lowest at 1.7 percent and 0.6 percent, respectively.
Among all industries, the technology sector kept a steady involuntary turnover rate that remained unchanged at 4.0 percent from 2023 to 2024. Conversely, industries like retail have stabilised as consumer spending improved.
The most difficult positions to fill continue to be in information technology, engineering and sales, which is consistent with 2023. In response to cost constraints and a need for greater cost efficiency, companies are adjusting their compensation strategies. New hire premiums have dropped from previous levels between 5.6 to 13.3 percent and now range between 1.3 to 8.2 percent.
One in three firms view cybersecurity roles as crucial to their organisation, with a 160 percent year on year (YOY) increase in headcount for such roles. Artificial Intelligence/machine-learning and risk managers roles had a 100 percent and 70 percent YOY increase, respectively. These roles are also seeing double digit growth in total compensation compared to 2023.
Wan Hua Cheng, director of talent analytics for southeast Asia at Aon, noted, "Involuntary turnover reflects shifts in skilled and low-wage labour market dynamics. In 2024, managerial levels are experiencing higher involuntary turnover due to reduced demand and economic restructuring. The technology sector, however, remains stable with a consistent involuntary turnover rate, indicating firms' cautious approach and moderate confidence in future performance. Companies are opting for targeted salary increases as they navigate uncertain times."
More information about Aon in Asia can be found here.
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The information contained in this document is solely for information purposes, for general guidance only and is not intended to address the circumstances of any particular individual or entity. Although Aon endeavours to provide accurate and timely information and uses sources that it considers reliable, the firm does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of any content of this document and can accept no liability for any loss incurred in any way by any person who may rely on it. There can be no guarantee that the information contained in this document will remain accurate as on the date it is received or that it will continue to be accurate in the future. No individual or entity should make decisions or act based solely on the information contained herein without appropriate professional advice and targeted research.
source: Aon
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