Salaries in Thailand expected to rise in 2022 as employers show cautious optimism in a post-pandemic future, Mercer survey finds


  • Overall median salary increments projected to hit 5% in Thailand next year, led by Life Sciences sector
  • Greater workforce stability expected, with only 6% of employers reducing their headcount in 2022
  • Voluntary and involuntary attrition rates for first half of 2021 remain lower than pre-pandemic levels

 

Thailand, 29 November 2021 – Companies in Thailand are forecasting a median 5% increase in overall salaries for 2022 as the economy starts to reopen after a prolonged and severe COVID-19 outbreak. Excluding companies that have implemented wage freezes, this is a positive uptick from 4.5% in 2021, the lowest mark for Thailand in a decade, and highlights a return for salary increments to pre-pandemic levels of 5% in 2019.

 

This is according to the annual Total Remuneration Survey (TRS) 2021 by Mercer that polled 598 organizations across 15 industries in Thailand between April and June this year. The projected salary increments reflect cautious optimism for hopes of an economic recovery in Thailand with Gross Domestic Product (GDP) estimated to grow by 1.2%[1] this year and 3.5 to 4.5% in 2022. In comparison, Thailand’s median salary increment is slightly below the Asia Pacific average of 5.4%. Across Asia, the median salary increases reflect a divergence in pay progression between emerging and developed economies, with estimates as high as 9% in Pakistan to 2.3% in Japan, the lowest in the region.

 

Piratat Srisajalerdvaja, Mercer’s Career Products Business Leader for Thailand, said, “The rebound in salary increments and bonus payouts shows that companies are hopeful of what lies ahead in 2022. However, with a limited talent pool in Thailand, it also means that employers need to review and revise their compensation packages strategically, as they would face stiffer competition to attract and retain talent in a fast-changing business environment.”

 

Salary increases led by Life Sciences sector

Across the industries surveyed, the Life Sciences industry is expected to see the biggest pick up in salary increment at 5%[2] in 2022, up a full percentage point from 4% in 2021, followed by Life Insurance (increase of 0.9% to 4.5%) and Chemical (up 0.7% to 5%). In terms of variable bonuses, employers in Thailand have also increased the budget for bonus payout to 3.5 months for 2021, compared to 2.3 months in 2020, with the Life Sciences and Automotive industries seeing the highest increase.

 

Commenting on the industry salary trends, Mr Piratat added, “The Life Sciences, Life Insurance and Chemical industries are typically more recession-proof. Industries that are dependent on consumer spending like Consumer Goods, as well as labor-intensive ones such as Manufacturing and Shared Services, are more likely to see smaller increments due to the emergence of real inflationary pressures and challenges in the country’s key export markets such as the United States and China.”

 

Greater workforce stability expected in 2022

In general, employers in Thailand are maintaining the status quo on recruitment efforts. Half of the survey’s respondents said that there will be no change to their headcount in 2022. One in five companies intend to add headcount whereas only 6% of employers indicated they will reduce their headcount, down from 11% this year. Both voluntary and involuntary attrition for the first half of 2021 also dipped to 4.8% and 2.1% respectively, below pre-pandemic levels.

 

Juckchai Boonyawat, Mercer’s CEO for Thailand said, “As the Thai economy continues to face headwinds, the downward trend for voluntary attrition, especially in the last two years, reflects the uncertainty and growing anxiety of employees, when they consider switching jobs in this climate. The dip in involuntary attrition, however, shows positive signs of a rebound in 2022. With companies in a better position, few are looking to trim headcount to keep their businesses afloat. It’s a win-win for all parties involved. On one hand, more employees are staying in their jobs and on the other hand, businesses are confident in their ability to retain talent as the economy recovers. For the longer term, employers should pay more attention to taking care of employees who stay on by enhancing their benefits to support workplace flexibility and implementing health and mental wellness programs.”

 

[1] GDP Q3/2021 Report, Office of the National Economic and Social Development Council

[2] 2021 Mercer E3 Salary Movement Snapshot Survey


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 2021, please see here.

About Mercer

 

Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 81,000 colleagues and annual revenue of over US$19 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.com. Follow Mercer on LinkedIn and Twitter.

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