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Wage Raises in Emerging Markets Outpace
Developed Economies
Employees in high-growth “emerging” market countries
will see their wages rise sharply in 2013, while their
counterparts in North America and Europe can expect more
modest pay raises in the coming year, according to the
latest 2013 pay forecast data from consultancy Hay Group.
In the so-called BRIC countries (Brazil, Russia, India and
China), pay will climb significantly in 2013:
• Brazil—up 5.5 percent.
• Russia—up 9 percent.
• India—up 10.5 percent.
• China—up 9.5 percent.
Meanwhile, developed economies can expect more
cautious increases—for example, just 3 percent in the
United States and United Kingdom. With annual consumer
price index growth factored in—2 percent in the U.S. and
2.8 percent in the U.K.—employees in these two countries
are set to see a net pay gain of 1 percent and 0.2 percent,
respectively.
“Ongoing economic uncertainty in North America and
Europe has caused organizations in these regions to take a
more cautious approach to salary increases than their highgrowth-market counterparts,” said Jeff Blair, Hay Group’s
U.S. productivized services leader, in
a media release. “Global
organizations trying to attract top
talent across both markets will have
to pay careful attention to reward
program design and focus more on
creating positive cultures with
strong values to attract, engage
and retain high-performing
employees in each region.”
Hay Group, as the intensifying “war for talent” will see
wage hikes of 9.5 percent in 2013—up 1.1 percent from a
year earlier—despite slower economic growth.
• Middle East/Africa—up 6 percent. In Egypt, pay is
expected to climb by 10 percent, followed closely by South
Africa (7 percent). By contrast, Middle Eastern economies
such as the United Arab Emirates (5 percent), Oman (5
percent) and Bahrain (4.3 percent) can expect more modest
wage increases.
• Pacific—up 3.5 percent. For Australia and New Zealand,
salary predictions outpace those of other developed
markets only slightly. The average predicted rise has not
changed in the region in the past three years.
• Europe—up 3.3 percent. Crisis-weary companies in
Greece and Ireland will not raise pay in 2013. Increases in
Germany, the U.K. (both 3 percent) and France (2.6
percent) will be subdued. Meanwhile, emerging eastern
European countries will see larger increases, led by Ukraine
(10 percent).
• North America—up 2.9 percent. The U.S. economy is
expected to grow by 2.1 percent in 2013, Canada by 2.2
percent and Mexico by a slightly healthier 3.9 percent. Still,
salary growth in the region is set to outpace inflation, which
is predicted to average 2.6 percent regionally.
Hay Group’s research is based on the salary expectations of
For example, with pay rates barely
outstripping or in some cases falling
behind inflation, North American
and European organization s should
place a greater emphasis on
variable pay and nonfinancial
recognition programs, as well as
career development opportunities
to retain key talent, Blair advised.
Regional Pay Forecasts
From a regional perspective, the
following average pay increase
rates were forecast by Hay Group:
• Latin America—up 8.9 percent. Latin American firms are
set to be the big spenders of 2013, especially in countries
with high inflation rates. Venezuela will see the steepest
pay increases (29 percent), followed by Argentine
organizations (24.5 percent). The smallest increase is
forecast for Guatemala (4.5 percent).
more than 20,000 reward specialists in 69 countries
worldwide, representing 14 million employees.
• Asia—up 7.6 percent. Pay increases in the newly
emerging “second generation” of high-growth Asian
economies are outstripping those in the region’s more
developed countries. In Japan, wages will increase just 2
percent in 2013, whereas in less mature markets—including
Vietnam (12.8 percent), Indonesia (10.6 percent), the
Philippines (8 percent) and Malaysia (6.2 percent)—wages
are rising rapidly. China is the biggest surprise, according to
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