Salary Increase Trend in Relation to Inflation and GDP A moderate salary increase rate provided due to low inflation

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1 Both Multination Companies (MNCs) and big local companies (Vietnam) provided a lower salary increase rate this year, a survey by Mercer who is the leading global provider of human resource services and its associate, Talentnet Corporation has reported in its Total Remuneration Survey The Total Remuneration Survey (TRS) has 418 MNCs and big local companies joining this year from various industries. Hi-tech, Consumer Goods, Chemical, Manufacturing, and Pharmaceutical companies are in the top list. The survey collected the data from more than 142,587 employees with 1,572 positions across Vietnam. This has also seen as the largest and the most comprehensive salary report in Vietnam for 14 consecutive years. Thanks to the business expansion from Hi-Tech industry, this is the first year Hi-Tech industry has the largest number of participants which reflecting their attention on the investment to human capital besides technical focus. Salary Increase Trend in Relation to Inflation and GDP A moderate salary increase rate provided due to low inflation Ms. Hoa Nguyen, the leader of Mercer Remuneration Surveys & HR Consulting from Talentnet said, With not much change in business condition and a lower inflation forecasted, a lower salary increase rate is provided for 2013 and planned for 2014.

2 Salary Increase Rate By Industry Looking into salary increase rate from across industries, Pharmaceutical, Manufacturing and FMCG Industry (Fast Moving Consumer Goods) provided higher rate than other industries by 12% since they are not being impacted as much as others by the economy fluctuation. On the other hand, the financial service industry which includes non-banking and banking industry has the lowest salary increase rate at 8.1% and 8.7% due to less market demand in difficulty business condition.

3 Taking a look at the pay difference between Local companies and MNC companies, the gap is still high between both sides by 29%. Moreover, the pay difference is gradually wider from professional level to executive level. Local companies often provide higher bonus than MNC companies. Currently, in order to get the talents from MNCs, Local companies often willing to pay out of its salary range for the high level positions. However, it would take a number of years before big local companies pay catches up with multinational companies pay. For now, in order to attract, motivate, and retain best and potential employees, local companies often use long term incentive tool such as stock grant, stock option, or long term cash, Ms. Hoa said.

4 The ever-changing economy impacts to the both employers and employees, making them more cautious in recruitment and job search. Overall, the turnover rate in 2012 among industries decreases by 2-3% compare to Average voluntary staff turnover rate in 2012 is at the lowest point compared to the last five years by 13% from MNCs. The highest turnover rate belongs to Hitech industry, due to the shortage of skilled and talented people. As last year, Oil and Mining is still the most stable industry with lowest turnover rate at 6.3% Thus, the turnover rate from MNC companies is lower than local companies (13% vs. 16.9%). Among that, the turnover rate from professional sale continues to be the highest rate.

5 Benefit Practices Development - MNC vs Local Benefits become more prevalent in Local companies According to the TRS survey in 2013, the benefits offered to employees are quite aligned comparing last year. While AD&D insurance and private health insurance is prevalent, life insurance and car benefits are used to attract and retain talents at management level. Local companies provide more car benefits to executive and senior management levels than MNCs. Hiring Intention predicted for next 12 months 2013 TRS

6 Due to the uncertain business condition, 60% companies tend to have more recruitment compared to 68% last year. There are 37% of companies plan that they will keep the same head count. Moreover, there is only 3% of companies participating in the survey indicate they will have headcount cut for year Sales manager, sales executive and marketing manager positions are still the hot jobs. They have been staying in the list of 3 hot jobs that companies have difficulty to recruit and retain for many years. With an increase number of Vietnamese companies joining salary survey this year, it indicates that big local companies now have a more serious view of point at their remuneration system. They want to improve and manage their salary and bonus budget more effectively. To know exactly how competitive their salary, allowances, and bonuses compared to the market, companies are willing to join salary survey and invest on remuneration survey report which will help them to make informative decisions. Participate on the survey also help them to manage, allocate salary budget much more effectively in order to motivate employees. It also provides them a trustable source when they need to provide flexible plan in paying when needed to recruit and retain talents.