LOS ANGELES--(BUSINESS WIRE)--A forecast issued today by Korn Ferry (NYSE: KFY) reveals that, adjusted for inflation, real-wage salaries globally are expected to grow only an average of 1.0 percent in 2019. This is down from a 1.5 percent prediction for 2018.
“With inflation rising in most parts of the world, we’re seeing a cut in real-wage increases across the globe,” said Bob Wesselkamper, Korn Ferry Global Head of Rewards and Benefits Solutions. “The percentage of salary increase or decrease will vary by role, industry, country and region, but one thing is clear, on average, employees are not seeing the same real pay growth they did even one year ago.”
Highest real wage growth in Asia
In Asia, salaries are forecast to increase by 5.6 percent, up from 5.4 percent last year. Inflation-adjusted real wage increases are expected to be 2.6 percent, the highest globally, but down from 2.8 percent last year.
China’s real-wage forecasted growth for 2019 weakened at 3.2 percent, down from 4.2 percent last year. Japan saw a real-wage prediction of 0.1 percent for 2019 compared to the 2018 prediction of 1.6 percent. Asian countries that saw year-over-year increases include Vietnam’s forecast of 4.8 percent, up from 4.6 percent last year, and Singapore‘s forecast of 3.0 percent, up from 2.3 percent last year.
Eastern Europe Faring Better than Western Europe
According to the Korn Ferry forecast, employees in Eastern Europe are set to see an average salary increase of 6.6 percent in 2019. After taking inflation into account, real wages are forecast to rise by 2.0 percent, which is up from 1.4 percent last year. In Western Europe, workers are expected to see lower wage increases, with an average increase of 2.5 percent, and inflation-adjusted real wage increases of 0.7 percent. This is down from the predicted 0.9 percent real-wage growth of last year.
Wages are predicted to increase 2.5 percent in the United Kingdom. Combined with a 1.9 percent inflation rate, real wages are expected to increase by 0.6 percent. This is up more than a percentage point from 2018, when wages were predicted to decrease by -0.5 percent. Employees in two of Europe’s largest economies, France and Germany, are forecast to see real-wage rises of 0.5 percent and 1.0 percent respectively.
North America Lagging
In North America, the average salary growth is predicted to be 2.8 percent in 2019, and when adjusted for inflation, the real-wage growth is expected to be 0.6 percent.
In the United States, an average 3 percent pay increase is predicted, which is the same as last year and the year before. Adjusted for the expected 2.4 percent inflation rate in 2019, the real wage increase is forecast to be 0.6 percent, down from last year’s 1.0 percent. Canadian workers will see salaries increase by 2.6 percent, and with inflation at 2.0 percent, will also experience real-wage growth of 0.6 percent.
Inflation Tempers Salary Growth in Africa
Although top-line salaries will increase by 7.7 percent in Africa, high inflation means the real increase is predicted to be only 0.9 percent. In Egypt, salaries are expected to increase by 15 percent, but a 14.4 percent inflation rate means employees will only see a 0.6 percent real-wage increase.
Latin America Sees Year-Over-Year Drop in Real Wage Growth
Employees in Latin America are forecast to see a 4.6 percent gain in wages. With inflation, the real-wage increase in the region is expected to be 1.3 percent. This is down from 2.1 percent real-wage growth predictions from last year.
In Colombia, inflation is expected to be 2.9 percent for 2019. With a salary increase projected at 5.0 percent, this puts real wages for Colombia up 2.1 percent. In Brazil, the expected salary increase is 4.2 percent, and with 4.3 percent inflation, workers are expected to see a -0.1 percent decrease in real wages.
Middle East Sees Second-Lowest Real Salary Increase
In the Middle East, wages are expected to increase by 3.6 percent, compared to 3.8 percent last year. Inflation-adjusted wage increases are predicted to be 0.4 percent, compared to 0.9 percent last year and 2.5 percent the year before. Things are looking better in the UAE this year, with an inflation rate of 3.2 percent combined with pay increases of 3.9 percent, which means that real wages are expected to increase by 0.7 percent. Last year real wages were predicted to fall by -0.5 percent.
Qatar and Lebanon are both predicted to see a drop in real wages, with Qatar forecast to have a -0.5 percent loss in real wages, and Lebanon to have a -1.7 loss in real wages. This is compared to 1.8 percent growth in Lebanon last year and a 6.1 percent growth the year before.
The Pacific Sees the Lowest Real Salary Increase
Wages in the Pacific are forecast to grow by 2.5 percent, and adjusted for inflation, the rise in real wages is predicted to be 0.3 percent. Australia will see a 2.5 percent top-line growth, a 2.3 percent inflation rate, and a 0.2 percent real wage increase. In New Zealand, a 2.5 percent salary increase is forecast, and with 2.2 percent inflation, is expected to see a 0.3 percent real salary increase.
Korn Ferry pay experts recommend taking a holistic approach when determining pay.
“While inflation indices are a solid benchmark for reviewing market trends in pay, we recommend that companies take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and local trading conditions,” said Benjamin Frost, Korn Ferry’s Global General Manager – Pay. “Compensation programs need to be regularly reviewed to make sure they align with changing business and market conditions.”
About the study
The data was drawn from Korn Ferry’s pay database which contains data for more than 20 million job holders in 25,000 organizations across more than 110 countries.
It shows predicted salary increases, as forecasted by global HR leaders, for 2019 and compares them to predictions made at this time last year regarding 2018. It also compares them to 2019 inflation forecasts from the Economist Intelligence Unit.
Our interactive site with more detailed figures, and a downloadable infographic with headline figures for each country is here.
Editor’s Note: Global and regional averages exclude Argentina due to its particularly high inflation.
|
Region |
Country |
2019 |
2019 |
"Real" |
2018 |
2018 "real" |
||||||
| Africa | Algeria | 6.8% | 6.4% | 0.4% | 6.5% | 0.8% | ||||||
| Latin America | Argentina | 27.0% | 35.3% | -8.3% | 21.9% | 7.3% | ||||||
| East Europe | Armenia | 5.3% | 3.2% | 2.1% | 5.3% | 2.0% | ||||||
| Pacific | Australia | 2.5% | 2.3% | 0.2% | 2.5% | 0.4% | ||||||
| West Europe | Austria | 3.0% | 2.0% | 1.0% | 2.5% | 0.8% | ||||||
| East Europe | Azerbaijan | 8.0% | 4.1% | 3.9% | 10.0% | 4.8% | ||||||
| Middle East | Bahrain | 3.0% | 3.8% | -0.8% | 4.0% | 1.9% | ||||||
| East Europe | Belarus | 8.1% | 5.3% | 2.8% | 10.2% | -0.3% | ||||||
| West Europe | Belgium | 3.0% | 2.2% | 0.8% | 3.0% | 1.3% | ||||||
| Latin America | Bolivia | 5.5% | 3.2% | 2.3% | 6.8% | 2.4% | ||||||
| Africa | Botswana | 4.8% | 4.0% | 0.8% | 4.7% | 0.7% | ||||||
| Latin America | Brazil | 4.2% | 4.3% | -0.1% | 7.3% | 3.3% | ||||||
| East Europe | Bulgaria | 4.4% | 3.2% | 1.2% | 3.8% | 1.8% | ||||||
| North America | Canada | 2.6% | 2.0% | 0.6% | 2.6% | 0.9% | ||||||
| Latin America | Chile | 5.0% | 3.2% | 1.8% | 4.8% | 2.1% | ||||||
| Asia | China | 6.0% | 2.8% | 3.2% | 6.0% | 4.2% | ||||||
| Latin America | Colombia | 5.0% | 2.9% | 2.1% | 5.3% | 2.6% | ||||||
| Latin America | Costa Rica | 3.0% | 4.2% | -1.2% | 3.7% | 0.4% | ||||||
| East Europe | Croatia | 2.9% | 1.5% | 1.4% | 2.8% | 1.0% | ||||||
| West Europe | Cyprus | 2.9% | 1.5% | 1.4% | 3.7% | 2.4% | ||||||
| East Europe | Czech Republic | 4.7% | 2.1% | 2.6% | 3.9% | 1.9% | ||||||
| West Europe | Denmark | 2.4% | 1.3% | 1.1% | 2.0% | 0.1% | ||||||
| Latin America | Dominican Republic | 5.0% | 4.3% | 0.7% | 5.1% | 1.3% | ||||||
| Latin America | Ecuador | 2.5% | 1.5% | 1.0% | 5.0% | 4.4% | ||||||
| Africa | Egypt | 15.0% | 14.4% | 0.6% | 15.0% | -3.8% | ||||||
| Latin America | El Salvador | 4.5% | 1.6% | 2.9% | 3.7% | 2.2% | ||||||
| East Europe | Estonia | 4.1% | 3.3% | 0.8% | 3.5% | 0.5% | ||||||
| West Europe | Finland | 1.8% | 1.8% | 0.0% | 1.0% | -0.2% | ||||||
| West Europe | France | 2.0% | 1.5% | 0.5% | 2.0% | 0.7% | ||||||
| East Europe | Georgia | 5.8% | 3.3% | 2.5% | 5.7% | 2.6% | ||||||
| West Europe | Germany | 3.0% | 2.0% | 1.0% | 2.4% | 0.8% | ||||||
| Africa | Ghana | 13.6% | 10.0% | 3.6% | 15.6% | 5.9% | ||||||
| West Europe | Greece | 2.0% | 1.2% | 0.8% | 2.0% | 1.0% | ||||||
| Latin America | Guatemala | 5.0% | 4.2% | 0.8% | 4.7% | 0.0% | ||||||
| Latin America | Honduras | 6.1% | 4.6% | 1.5% | 5.1% | 1.0% | ||||||
| Asia | Hong Kong, China | 4.0% | 2.3% | 1.7% | 4.0% | 1.7% | ||||||
| East Europe | Hungary | 5.3% | 3.3% | 2.0% | 4.6% | 1.7% | ||||||
| Asia | India | 10.0% | 5.0% | 5.0% | 9.0% | 4.7% | ||||||
| Asia | Indonesia | 7.8% | 4.1% | 3.7% | 8.0% | 3.4% | ||||||
| West Europe | Ireland | 2.5% | 1.4% | 1.1% | 2.3% | 2.0% | ||||||
| West Europe | Italy | 2.2% | 1.4% | 0.8% | 2.7% | 1.8% | ||||||
| Asia | Japan | 2.0% | 1.9% | 0.1% | 2.0% | 1.6% | ||||||
| Middle East | Jordan | 4.0% | 3.7% | 0.3% | 4.0% | 1.6% | ||||||
| East Europe | Kazakhstan | 8.4% | 6.6% | 1.8% | 9.0% | 2.8% | ||||||
| Africa | Kenya | 6.6% | 6.2% | 0.4% | 7.5% | 1.0% | ||||||
| Asia | Korea | 4.5% | 1.7% | 2.8% | 4.5% | 2.8% | ||||||
| Middle East | Kuwait | 3.8% | 1.6% | 2.2% | 4.3% | 0.7% | ||||||
| East Europe | Latvia | 4.9% | 2.7% | 2.2% | 4.0% | 1.0% | ||||||
| Middle East | Lebanon | 3.0% | 4.7% | -1.7% | 5.0% | 1.8% | ||||||
| East Europe | Lithuania | 5.0% | 3.0% | 2.0% | 5.0% | 2.2% | ||||||
| West Europe | Luxembourg | 3.2% | 1.9% | 1.3% | 2.6% | 1.0% | ||||||
| Asia | Malaysia | 5.0% | 1.4% | 3.6% | 6.0% | 3.5% | ||||||
| Africa | Mauritius | 4.1% | 4.6% | -0.5% | 4.2% | 2.9% | ||||||
| Latin America | Mexico | 5.5% | 4.4% | 1.1% | 4.6% | 0.7% | ||||||
| Africa | Morocco | 3.7% | 1.3% | 2.4% | 3.8% | 2.6% | ||||||
| Africa | Mozambique | 7.8% | 6.1% | 1.7% | 10.0% | 3.5% | ||||||
| Africa | Namibia | 6.6% | 5.4% | 1.2% | 7.0% | 1.2% | ||||||
| West Europe | Netherlands | 3.0% | 2.5% | 0.5% | 2.6% | 1.2% | ||||||
| Pacific | New Zealand | 2.5% | 2.2% | 0.3% | 2.5% | 1.0% | ||||||
| Latin America | Nicaragua | 6.6% | 3.9% | 2.7% | 6.6% | 2.1% | ||||||
| Africa | Nigeria | 11.0% | 13.6% | -2.6% | 10.8% | -3.2% | ||||||
| West Europe | Norway | 3.0% | 2.1% | 0.9% | 2.5% | 0.7% | ||||||
| Middle East | Oman | 3.0% | 3.0% | 0.0% | 3.0% | 0.8% | ||||||
| Latin America | Panama | 3.2% | 1.7% | 1.5% | 3.0% | 1.6% | ||||||
| Asia | Papua New Guinea | 5.0% | 6.2% | -1.2% | 4.0% | -2.6% | ||||||
| Latin America | Peru | 4.0% | 2.7% | 1.3% | 4.3% | 1.5% | ||||||
| Asia | Philippines | 5.8% | 4.5% | 1.3% | 5.0% | 2.8% | ||||||
| East Europe | Poland | 4.0% | 2.0% | 2.0% | 3.5% | 1.3% | ||||||
| West Europe | Portugal | 2.1% | 1.8% | 0.3% | 2.0% | 0.7% | ||||||
| Middle East | Qatar | 3.3% | 3.8% | -0.5% | 3.7% | 1.1% | ||||||
| East Europe | Romania | 5.1% | 3.5% | 1.6% | 5.0% | 2.5% | ||||||
| East Europe | Russian Federation | 5.8% | 4.5% | 1.3% | 7.0% | 3.0% | ||||||
| Middle East | Saudi Arabia | 4.9% | 2.3% | 2.6% | 3.2% | 0.1% | ||||||
| East Europe | Serbia | 4.1% | 2.7% | 1.4% | 4.8% | 2.1% | ||||||
| Asia | Singapore | 4.0% | 1.0% | 3.0% | 3.7% | 2.3% | ||||||
| East Europe | Slovakia | 4.1% | 2.3% | 1.8% | 3.0% | 1.3% | ||||||
| Africa | South Africa | 6.5% | 5.5% | 1.0% | 7.0% | 1.6% | ||||||
| West Europe | Spain | 2.4% | 1.8% | 0.6% | 2.0% | 1.0% | ||||||
| West Europe | Sweden | 2.0% | 1.9% | 0.1% | 2.0% | 0.2% | ||||||
| West Europe | Switzerland | 1.5% | 1.3% | 0.2% | 1.7% | 1.1% | ||||||
| Asia | Taiwan, China | 3.9% | 1.5% | 2.4% | 4.0% | 3.3% | ||||||
| Africa | Tanzania | 6.1% | 4.8% | 1.3% | 7.9% | 2.7% | ||||||
| Asia | Thailand | 5.5% | 1.6% | 3.9% | 5.5% | 4.5% | ||||||
| Africa | Tunisia | 8.0% | 5.0% | 3.0% | 7.1% | 2.2% | ||||||
| East Europe | Turkey | 20.0% | 14.5% | 5.5% | 9.0% | 1.0% | ||||||
| Africa | Uganda | 6.2% | 5.1% | 1.1% | 8.0% | 2.5% | ||||||
| East Europe | Ukraine | 14.0% | 8.1% | 5.9% | 15.0% | 4.4% | ||||||
| Middle East | United Arab Emirates | 3.9% | 3.2% | 0.7% | 4.1% | -0.5% | ||||||
| West Europe | United Kingdom | 2.5% | 1.9% | 0.6% | 2.0% | -0.5% | ||||||
| North America | United States of America | 3.0% | 2.4% | 0.6% | 3.0% | 1.0% | ||||||
| East Europe | Uzbekistan | 8.0% | 12.5% | -4.5% | 7.3% | -7.7% | ||||||
| Asia | Vietnam | 8.8% | 4.0% | 4.8% | 8.6% | 4.6% | ||||||
| Africa | Zambia | 9.0% | 9.8% | -0.8% | 12.3% | 5.4% |
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We help clients synchronize strategy and talent to drive superior performance. We work with organizations to design their structures, roles, and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop, and motivate their people.
