Southeast Asia salaries set for a 2025 bump: Aon
The budgeted salary increases for 2025 across Southeast Asia are projected to be higher than in 2024, according to a report by professional services firm Aon.
Budgeted salary increases for 2025 across Southeast Asia are projected to be higher than in 2024. Photo courtsy of Aon.
According to the report, businesses in the region are likely to maintain or increase their overall workforce numbers.
The report which was conducted from July to September 2024 analyzed data collected from more than 950 companies across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Notably, according to Aon’s Global Risk Management Survey, the failure to attract and retain top talent has emerged as a key risk for organizations in the Asia-Pacific, moving from the ninth top risk in 2021 to the fourth in 2023.
Rahul Chawla, Aon’s partner and head of talent solutions for Southeast Asia, told CNBC Make It that the salary increase rates are still anticipated to be higher in 2025 than they were in 2024, while a lower inflationary, and lower interest rate environment is expected in the coming time.
According to him, what that really means is that in spite of a softening inflationary environment, salary increases are still hardening up, which means that there is a talent supply and demand discrepancy which goes beyond inflation.
While inflation remains an element in the expected increases, other factors also come into play, such as the high demand for skilled talent in the region.
Chawla said said Southeast Asia has been “a sandbox environment for a lot of technology companies, for example, in Singapore, to be setting up shop, so it is attracting capital... and then that creates a demand for talent to serve this growth.
Salary increases also vary across industries in Southeast Asia, with technology and manufacturing budgeting for the highest bump at 5.8%, according to the report. Retail; consulting, business and community services; and life sciences and medical devices are set for a bump of 5.4%.
Sectors of energy, financial services, and transport are expected to increase by 4.9%, 4.8% and 4.1%, respectively.
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