80% of Countries Project Salary Increases Greater Than Inflation
The key question that is top of mind for most global compensation leaders is ‘how much do we predict salary will grow in [blank]?’ You can fill in the blank as to which countries or regions you are asking us about. The Aon Hewitt Global Salary Increase Survey for 2017/2018 is now available and we are able to answer those questions for 128 countries around the globe.
Global Salary Increase Report Highlights
- Most Countries Project Higher Increases in 2018 – 84% of the countries where we have data for both 2017 actual and 2018 projections indicate they plan to spend more next year. The chart below shows the number of countries planning either higher or lower increases broken down by global regions. The region with the most variation is Latin America, which includes South America, Central America and the Caribbean. Nearly one-third of the countries (30%) in Latin America are projecting growth to their salary budgets in 2018, but they are tightening up to reduce the amount of those planned increases.
- The amount of salary increase in each region varies significantly – The amount of the salary budget projection over this year’s actual shows that companies are reacting to the competitive pressures in each respective market. It is important to note that the table is reflecting the percentage change from 2017 to 2018 and not the salary budget growth. For example, if actual salary growth in 2017 was 3%, but projected to be 4% in 2018, that is a 33% increase in salary growth projections.
- Real wage growth expected for 80% of countries – Salary increases for many workers around the world for the past several years have not kept up with inflation. In 2018, the amount of wage growth that companies have projected should result in increased purchasing power for employees in 80% of the countries where we are reporting data.
- Which countries are expecting the highest increases? – We have plotted the top 3 countries in each geographic region based on the overall projected wage increase.
Companies in all parts of the world are generally seeing growth in their salary budgets, but the complexities of planning global salary budgets mean that compensation professionals need more than just a growth factor percentage. Yes, you need the merit increase projections in each market where you operate, but should also have a comprehensive plan for managing your salary growth.
The full Global Salary Increase Survey report provides much more detail that you would want while preparing your 2018 compensation plans. The report shows actual and projected increase by type and by job level in each of the 128 countries. We also provide insights on
- Short-term incentives
- Long-term incentives
- Sales compensation trends, and
- Trends regarding identification and rewarding top talent
Contact us to learn how you can purchase your copy of this report to aid in your compensation planning for 2018.