Rebound predicted for financial sector salaries across Asia

Here's why the grass will be greener.

A new survey conducted by professional services company Towers Watson shows that persons working in the financial services sector can look forward to increases region-wide averaging 6.2% compared to 5.7% in 2013. The biggest raises are anticipated in India (10%), Indonesia (9%) and China (8.8%).

The region’s major financial centers of Hong Kong, Singapore and Japan will see more modest raises in 2014, or 4.5%, 4% and 2.3%, respectively. “Salaries increases continue to remain strong in the region due to several factors such as increased in demand for compliance staff to meet with the increased regulations and regional expansions by local players beyond their domestic shores,” said Jeffrey Tang, Director of Towers Watson’s Talent and Rewards practice in Hong Kong.

The company said its survey shows the increase in salaries throughout Asia is a positive sign, particularly because the increases are in a wide range of industry sectors. Another important issue organizations must take into account is performance based salary and the ability to distinctly establish this pay rate difference.

This means that employees with excellent work performance receive a higher salary increase than employees with moderate performance. Salaries across Asia Pacific are set to rise an average 7% in 2014, with China and Vietnam leading the way in East Asia in terms of increases after allowing for inflation and Japan seeing the smallest raises, said Towers Watson. Salaries in China are forecast to rise 8.5% and in Vietnam 11.5% in 2014, before inflation is taken into account.

After inflation is built in, both countries are set for 4.9% increases on average. Elsewhere, Hong Kong and Singapore salaries are set to rise 4.5%, India 11% and Japan 2.3%. The findings support the view that companies in Asia Pacific are finding it harder to both find and retain suitably skilled staff. One outcome of this is that more than 80% of the companies surveyed say a larger portion of their salary budget increase allocation would go to high performers in 2014.

Less than 1% of the companies anticipate a pay freeze, compared to nearly 4% in 2013.