- Adjusted for Inflation, Real Wages Up Only an
Average of 1 Percent –
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
2019SalaryForecast
2019Inflationforecast
"Real"salaryforecast
2018Salaryforecast
2018 "real"increaseprediction
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190115005929/en/
Korn FerryTracy
KurschnerTracy.Kurschner@KornFerry.com612.309.3957
Korn Ferry (NYSE:KFY)
Historical Stock Chart
From Mar 2024 to Apr 2024
Korn Ferry (NYSE:KFY)
Historical Stock Chart
From Apr 2023 to Apr 2024