AON’s 2023 Salary Study Unveils Southeast Asia’s Compensation Landscape for 2024

AON plc’s 2023 Salary Increase and Turnover Study reveals projections of flat salaries in Malaysia and Singapore for 2024, contrasting with varying increases in Indonesia, the Philippines, Thailand, and Vietnam. The study emphasizes the need for data-driven compensation strategies as businesses navigate talent attrition, cautiously optimistic hiring trends, and evolving economic landscapes in Southeast Asia.

24 January 2024 – AON plc, a prominent global professional services firm, has disclosed the comprehensive findings of its 2023 Salary Increase and Turnover Study, providing a detailed analysis of salary projections, attrition rates, and hiring trends across key Southeast Asian countries. Notably, the study projects salary stagnation in Malaysia and Singapore for 2024, while revealing varying increases in median salaries for Indonesia, the Philippines, Thailand, and Vietnam. The report emphasizes the challenges posed by talent attrition and the importance of data-driven compensation strategies to navigate an uncertain economic landscape.

The survey, conducted in the third quarter of 2023, unveils a nuanced outlook for businesses in Southeast Asia. Despite a cautious optimism about hiring, with 40 percent of companies reporting no changes to recruitment numbers, attrition rates have risen, particularly in the Philippines. Aon’s data indicates that headcount numbers remain above pre-pandemic levels, with layoffs concentrated in non-core/expansion areas. Notably, new hire premiums have decreased, signaling a shift in compensation strategy as companies prioritize cost efficiency.

Industries in Malaysia exhibit divergent salary increase trends for 2024, with the retail sector leading at 5.2 percent, followed by technology, life sciences, and medical devices, and manufacturing at 5.0 percent. Financial services lags slightly at 4.5 percent. The study highlights the importance of informed decision-making in compensation strategies as Southeast Asian economies face diverse challenges.

Inflationary pressures are a key consideration for firms, with the study revealing that across Southeast Asia, more than half of the roles in Malaysia, the Philippines, and Singapore have salary increases outrunning inflation. However, in Indonesia, Vietnam, and Thailand, the majority of salary increases fall behind inflation rates.

Rachel Jayaprakash, Market Leader of Talent Solutions for Aon in Malaysia, underscores the necessity for organizations to leverage insights and robust market data in crafting a holistic employee value proposition. She emphasizes the need for competitive pay packages to sustain the rising cost of living and build a resilient workforce.

Author: Terry KS

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