Good news for employees in Southeast Asia, as professional services firm Aon predicts higher budgeted salary increases in 2025 compared to this year. Additionally, businesses in the region are expected to retain or expand their workforce.
According to a report by CNBC, the demand for skilled workers is the main driver behind higher salaries next year despite decreasing inflation and lower interest rate environment. Aon’s survey also revealed that attracting and retaining quality employees has become a major concern, ranking as the fourth-highest risk in 2023, up from ninth in 2021.
An example of this is Singapore, where numerous tech companies are establishing operations. These companies require skilled workers to support the region’s rapid technological advancements and growth.
Aon has forecasted salary budgets for six Southeast Asian countries as follows:
- In Vietnam, the actual salary increased by 7.5% in 2023 and 6.4% in 2024. The budgeted salary for 2025 is expected to increase by 6.7%.
- In Indonesia, the actual salary increased by 6% in 2023 and 5.7% in 2024. The budgeted salary for 2025 is expected to increase by 6.3%.
- In the Philippines, the actual salary increased by 5.2% in 2023 and 5.4% in 2024. The budgeted salary for 2025 is expected to increase by 5.8%.
- In Malaysia, the actual salary increased by 5% in 2023 and 4.9% in 2024. The budgeted salary for 2025 is expected to increase by 5%.
- In Thailand, the actual salary increased by 4.7% in 2023 and 4.4% in 2024. The budgeted salary for 2025 is expected to increase by 4.7%.
- In Singapore, the actual salary increased by 4% in 2023 and 4.2% in 2024. The budgeted salary for 2025 is expected to increase by 4.4%.
The salary budgets across industries are expected to increase, with the largest rise anticipated in technology and manufacturing at 5.8%. Close behind are retail, consulting, business and community services, and life sciences and medical devices, all projected to increase by 5.4%.
Meanwhile, industries like energy, financial services, and transportation are expected to see more modest salary adjustments, with increases of 4.9%, 4.8%, and 4.1%, respectively.
Although salary adjustments are expected across Southeast Asia, Aon’s survey found that Singapore and Thailand are projected to have lower budgeted salary increases, at 4.4% and 4.7%, respectively.
Singapore typically sees slower salary adjustments due to its status as a developed market with lower inflation rates and slower GDP growth compared to others in the region. As for Thailand, the nation experiences slower economic growth and a less mobile talent pool, driven by language barriers and deployment challenges, which result in employees staying within the local market.
