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Companies in Venezuela are predicting 26 percent pay hikes in 2014, according to the latest salary-trends survey by ECA International, a global knowledge provider for organizations managing international assignments. However, with the country’s 38 percent inflation rate, Venezuelan workers are actually facing a spending-power reduction of 12 percent.
Employees in Argentina are set to see the second-highest salary increases next year, at 22 percent, but they, too, shouldn’t expect much of an uplift in real terms, as their nation’s inflation rate is forecast to be 25 percent.
After factoring in the expected inflation rate, the countries that come out with the highest real salary increases are Ukraine (6.1 percent and China (5 percent).
The lowest wage-increase forecasts are in Switzerland and Greece; employees there can expect raises of about 2 percent, according to the survey.
2013/2014 Salary Trends Survey reports on current and projected salary increases for local employees and is based on information collected from August to October 2013 from 316 multinational companies in 64 countries and regions.
“The data can be used by companies to monitor pay increases in both the home and host locations of their expatriate staff so that they can update pay packages according to the salary systems they use and ensure that system is still the most effective for meeting business objectives,” ECA said.
Worldwide Salary Boosts Forecast
Wages will rise by an average of almost 6 percent in 2014, according to company forecasts from around the world, with most employers setting increases at levels similar to 2013. Asia and Latin America will see the highest increases, with companies there forecasting pay hikes of approximately 10 percent and 11 percent, respectively. However, inflation in those regions is also expected to be higher. In Latin America increases after inflation will average 1 percent—the lowest globally.
In Asia the highest salary increases in 2014 will be given by companies in Pakistan and India. They are forecasting 13 percent and 11 percent salary hikes, respectively.
Companies operating in China are predicting salary increases of 8 percent in 2014. Allowing for inflation, Chinese workers will see a 5 percent bump in real terms, the highest in Asia.
“The ongoing need to attract and retain skilled workers, who are in short supply in China, is driving up wage increments there to among the highest levels in our survey,” said Steven Kilfedder, manager of cost of living and remuneration services at ECA International. “Over time, this trend may significantly narrow the traditional salary gap between China and Singapore. Our recent global research on buying power around the world also suggested that Chinese executives could even be better off than their United States counterparts by 2017 if the current trends continue. At present, salaries in China are increasing at more than double the pace of salaries in the United States.”
Companies in both Hong Kong and Singapore are forecasting 4.5 percent salary hikes next year.
The highest pay increases in Europe are being forecast by companies in Russia and Ukraine. Employees there can expect to see 8 percent jumps in salary. However, the average pay raise across Europe is predicted to be 3.5 percent. Employers in the U.K. are forecasting 3 percent increases in 2014. “Next year will be the fourth year in a row where companies have reported 3 percent wage increases in the U.K.,” said Kilfedder. “If inflation is 2.3 percent, as predictions indicate, employees in the U.K. will experience increases of just under 1 percent in real terms. While this would be higher than they’ve seen in recent years, these would be the second-lowest real wage increases in Europe after Finland and are among the lowest of all the countries we surveyed.”
In both the U.S. and Canada, companies are predicting 3 percent wage increases. Companies in Australia are forecasting 4 percent increases, while employees in the Middle East are set to see an average raise of 4.8 percent. Companies in South Africa are forecasting 7 percent wage raises.
Roy Maurer is an online editor/manager for SHRM.
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