Asia's markets have demonstrated further growth in the last year, which has impacted salaries throughout the region. Many employers are reporting pay increases in 2005 and this trend looks likely to continue in 2006. In addition, fewer companies are implementing pay freezes, according to the annual Asia-Pacific Salary Increase Survey conducted by Hewitt Associates, a global human resources services firm.

This year, India once again reported the highest average salary increase at 13.9%, and employees in the Indian IT-enabled industry received the highest increase across all five groups surveyed at 17.9%.

The Philippines recorded an impressive average overall salary increase of 8.2%, which was closely followed by China at 8.1%. As Thailand's economy continues to strengthen, employees enjoyed average salary increases of 6.3%. Meanwhile, Malaysia's salary increase budget ranged from 5.4% to 6.1%, and Singapore saw increases ranging from 3.4% to 4.3%. Salaries also rose in Australia, Japan, Hong Kong and Taiwan.

"Hong Kong's economy has continued to grow over the last year, so it comes as no surprise that companies awarded employees with a healthy salary increase in 2005," said Vincent Gauthier, head of Hewitt's Hong Kong operation.

Asia looks set for slow but steady economic growth in 2006, and many employers are demonstrating their faith in the region by projecting similar salary increases next year.

Fewer companies reported salary freezes for 2005 than 2004, and on the whole this improvement looks set to continue into 2006. In Korea, 5% of survey participants say they expect a salary freeze, compared to 4% in China and 3% in the Philippines. Meanwhile, 2.6% of employers in India and 2% in Hong Kong say they expect a salary freeze in 2006. None of the participating companies in Australia, Malaysia, Taiwan or Thailand expect salary freezes
next year.

Linking objectives to performance continues to be popular in Asia, and the ratio between variable and fixed pay will likely continue to increase in most countries except Singapore next year. Stock options remain the favored long-
term incentive.

Fixed bonuses were also popular this year. Leading the way, 81% of participating companies in Taiwan offered fixed bonuses to employees in 2005, closely followed by 72% in Singapore, and 67% in Thailand.

Attrition is a growing concern in Asia, and rates rose in most markets. The highest employee turnover rate was recorded in the Philippines at 18.1%. Other markets with high turnover rates include Taiwan at 17.7%, China at 14.4%, Thailand at 13.4%, India at 13.1%, and Singapore at 13%. Attrition in Malaysia remained almost static at 12.5% up from 12.4%, while in Australia the rate dropped down to 13.3% from 15.1% in 2004.

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