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December 31, 2015 at 08:03 AM
Workers around the world are expected see real wage increases of 2.5%, according to a Korn Ferry Hay Group forecast.
This is the highest increase in three years, the forecast says, as pay increases combine with historically low inflation to leave employees better off.
“This year’s global salary forecast shows that, for the majority of countries, real wage increases in 2016 are set to be the highest in three years,” said Philip Spriet, global managing director for productized services at Hay Group, in a statement. “Differing macro-economic conditions means there are stark variations globally, but overall decent pay increases, coupled with extremely low (and in some cases, zero) inflation, mean that the outlook is positive for workers.”
The forecast uses data from Hay Group PayNet, which contains information for more than 20 million job holders in 24,000 organizations across more than 110 countries.
It shows projected salary increases, as forecasted by global HR departments, for 2016 and compares them to predictions made at this time last year regarding 2015. It also compares them to inflation predictions for 2016 from the Economist Intelligence Unit.
After five years in which annual wage increases have averaged around 2% in the U.S., Korn Ferry Hay Group predicts a 3% salary increase for American workers in 2016. Along with a 0.3% inflation forecast, this equals a real wage increase of 2.7%.
This upward trend can also be seen across North America, where Korn Ferry says the labor market is buoyant. According to the forecast, Canadian workers will see salaries increase by 2.6% and experience real wage growth of 1.3%.
Meanwhile, Korn Ferry predicts the highest real wage growth will be seen in Asia, despite economic slowdown.
In Asia, salaries are forecast to increase by 6.4% – down 0.4% from last year. However, real wages are expected to rise by 4.2% – the highest globally.
The largest real wage increases are forecast in Vietnam (7.3%), China (6.3%) and Thailand (6.1%).
“In fact, despite China’s economic slowdown, coupled with plummeting stock markets and reduced exports, workers in the country are set to see an 8% salary increase in 2016 as employment rates continue to grow due to the increasing need for skilled workers and the sustained rise of the burgeoning middle class,” according to the forecast.
