It will be yet another up year for salaries—and depending on continents and countries, the hikes could be considerable.
According to Korn Ferry's much-watched forecasts, salaries are expected to raise 4.4 percent globally, and 2.3 percent after adjusted for inflation. Every region of the world expects post-inflation growth; however, Asia is responsible for much of it. The region’s 4.3 percent expected increase in real wages will be fueled by gains in emerging markets.
The study, done by Korn Ferry’s Hay Group division, looks at the pay data of more than 20 million job holders in 25,000 organizations across more than 110 countries. It shows predicted 2017 salary increases as forecasted by global HR departments, and compares them to similar predictions made regarding 2016 wages a year ago. In 2017, real wages are expected to grow in all eight regions Hay Group surveyed, but at a slower pace from last year’s 2.7 percent post-inflation expected gain.
“Although not as high as last year when we saw a three-year high, there are still positive real-wage gains across the globe,” said Benjamin Frost, group manager at Korn Ferry Hay Group. “In addition to predicted salary increases, inflation is relatively low in most countries, which has a positive impact on real wages.”
At the country level, Vietnam may see the largest gains, with real wages expected to grow 7.2 percent.It’s the opposite story in Argentina, where skyrocketing inflation is expected to reduce real wages by 12.5 percent. (Click here for a country-by-country breakdown of expected wages). In the United States, real wages are expected to rise 1.9 percent. Wages didn’t grow much for years after the financial crisis, but 2016 may have been a turning point on pay. Average hourly earnings rose 2.9 percent in 2016, the biggest gain since 2009. Inflation rose, too, but not enough to cancel out the jump in pay.
Within Asia, the major real-wage growth is expected to come from emerging markets such as Vietnam, Thailand, Indonesia, and India. China’s real wages are expected to grow 4.0 percent, much lower than the 6.7 percent growth in 2016, in part due to the lower economic growth projections of the world’s second largest economy.
Despite the turmoil following the Brexit decision, United Kingdom is faring reasonably well. Real wages are to increase by 1.9 percent in 2017, which is slightly higher than the western European average. Workers in France and Germany are forecast to see real-wage rises of 1.5 percent and 2.2 percent, respectively.
This year looks positive for workers in the Middle East, too. Despite plunging oil prices and economic and political turmoil throughout the region, real wages are expected to rise 2.5 percent.
In eastern Europe, real wages are set to rise by 2.1 percent, although citizens in some eastern European nations will see their money go far further than others. Real wages are expected to grow at least 4 percent in smaller countries such as Latvia, Poland, and Romania. But the Russian Federation is expected to see real wages decline by 0.1 percent in 2017, thanks to the country’s inflation rate of more than 7 percent.
Latin America, with average real increases of 1.1 percent, and Africa, with a 0.7 percent expected increase, likely will see the lowest real-wage gains, as almost all of the headline pay increases are eaten away by high inflation.
Get a personalized salary forecast from Korn Ferry! Click here, answer a couple of questions about where you live and the type of job you have, and find out what workers like you can expect in 2017.