Thailand, 3 November 2022 – Despite soaring inflation and an increase in energy and oil prices, employees in Thailand can expect a median 4.5% in salary increments for 2023. This is similar to the actual increase that was given out this year, which came on the back of better economic growth, and highlights a return to pre-pandemic levels.
This is according to the annual Total Remuneration Survey (TRS) 2022 by Mercer that polled 636 organizations across 15 industries in Thailand between April and June this year. The projected salary increments reflect guarded optimism as Thailand’s Gross Domestic Product (GDP) is expected to grow by 3.8% in 2023, the highest in recent years. In comparison, Thailand’s projected salary increment of 4.5% is slightly above the Asia Pacific average (which excludes India as of 3 November 2022) of 4.4%. Across Asia, the overall median salary increases reflect a divergence in pay progression between emerging and developed economies, with estimates as high as 7.1% in Vietnam to 2.2% in Japan, the lowest in the region.
Mella Daracan, Mercer’s Career Products Business Leader for Thailand, said, “While hopeful, employers are largely taking on a wait-and-see approach as they evaluate the extent and impact of higher inflation rates amidst a fast-recovering economy. Hence, they have kept in line with this year’s increments. But they should also strategically review and revise their compensation packages as they could face stiffer competition in attracting and retaining their talent when more job opportunities abound in the coming year.”
No reduction in salary increments across the board
Across the industries surveyed, none have projected a reduction in salary increment. The Chemical, High Tech and Life Sciences have projected the highest increases of 4.9%, 4.8% and 4.8% respectively. Since the pandemic hit, the forecasted increase across most industries are the closest they have been to pre-pandemic levels of 5%, with the exception of the Automotive and Life Insurance industries. Their projected increases of 4.5% and 4% respectively are still one point behind their 2019 numbers. Demand for automotive and life insurance products is growing but it has yet to reach pre-pandemic levels.
In terms of variable incentives, employees in Thailand can expect bonus payouts of 1.3 to 2.5 months, with the highest median payout of 2.4 months coming from the Life Sciences industry.
Ms Daracan said, “These salary increments are keeping pace with inflation, and coupled with the recent increase in minimum wage of 5% in Thailand, lower wage workers could allay some of their fears related to higher costs of living. While this minimum wage increase may impact inflation with more money exchanging hands and add further pressure on businesses, Thailand’s overall economic outlook remains favorable, compared to the last couple of years.”
Companies maintain headcount in 2023
Employers in Thailand are maintaining the status quo on recruitment efforts. More than half (53%) of the survey’s respondents said that there will be no change to their headcount in 2023. One in five companies (22%) intend to add headcount whereas only 4% of employers indicated they will reduce their headcount, down from 7% this year.
At the same time, voluntary attrition in 2022 is expected to rise to pre-pandemic levels of above 10%, compared to last year’s 9.4%. Industries like Consumer Goods and Life Sciences are expected to see the highest turnover as these sectors are on a rebound with more business opportunities and job openings.
Juckchai Boonyawat, Mercer’s CEO for Thailand said, “As the Thai economy bounces back from the pandemic, we’re naturally seeing an upward trend for voluntary attrition, as businesses are re-hiring and expanding their talent pool to keep up with market demands. There is a strong competition for skilled talent in the country right now – companies are offering higher wages and better benefits to attract talent. Employees are also experiencing burnout and exhaustion from the past couple of years and desire change. Competing on wages alone is unsustainable; hence, employers may want to focus more on their employees’ value proposition in areas such as pay transparency, clearer career trajectory, and better well-being through flexible work arrangements and wellness programs.”
About Mercer’s Total Remuneration Survey
The Total Remuneration Survey, Mercer’s flagship annual compensation and benefits benchmarking study, identifies current pay practices and benefits policies, as well as budget, hiring and turnover trends for the year ahead. In addition, Mercer also conducts regular pulse surveys throughout the year to keep up with the impact of the rapidly changing business environment and compensation and workforce trends.
For more data and insights from Mercer’s Thailand Total Remuneration Survey 2022, please see here.
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