Salary increases in 2020 lowest in 10 years: survey

Salaries increased by 6.5% this year at multinational companies (MNCs) and 5.2% at Vietnamese companies, and are forecast to increase by 7 per cent and 7.7% next year, according to the Talentnet – Mercer Total Remuneration Survey.

Salary increases in 2020 lowest in 10 years: survey
Salary increase rates this year and forecasted for next year at multinational companies and local ones. — Source the 2020 Talentnet – Mercer Total Remuneration Survey

Speaking at a webinar held to release the survey on Wednesday, Hoa Nguyen, the company’s senior principal, human capital solutions, said 14 per cent of MNCs and 34 per cent of local companies did not increase salaries at all in 2020 due to Covid-19.

While higher than the inflation rate, the increases were the lowest in the last 10 years, she said.

In terms of salary increase by industry, insurance, high-tech and life sciences, less impacted than most other industries, topped with 8,7 per cent, 8,5 per cent and 8,4 per cent hikes.

Oil and mining, banking and sourcing industries had the lowest increases of 2,1 per cent, 5,6 per cent and 6,5 per cent.

Banking and non-banking financial services and life sciences companies paid the highest bonuses of 22.4 per cent, 20.1 per cent and 18.6 per cent. 

Technology, transport and logistics and retail paid the lowest rates of 13.8 per cent, 13.6 per cent and 12.5 per cent.

The report also said in the first half of 2020 there was a slight decrease in voluntary turnover from last year due to the impact of the pandemic on job availability.

 

Phuong Nguyen, director, human capital solutions, Talentnet, said, “Despite the effects of Covid-19, 13 per cent of companies paid special Covid-19-related bonuses to employees who are critical to meeting business goals.”

Of them, 69 per cent paid a one-time bonus, 13 per cent each paid monthly and quarterly and the remaining 5 per cent paid in other forms, she said.

Talking about recruitment trends in 2021, she said 40 per cent of companies plan to add staff next year, 5 per cent intends to reduce and 55 per cent expect no change.

Godelieve van Dooren, partner, Mercer Singapore, said “During these uncertain times, companies might need measures to manage current costs, but they should not be short-sighted as they will need employees when business starts picking up again.

“It is critical to balance economic decisions and empathy with a longer-term look towards what’s the next right thing your company needs to do to succeed and build a better, brighter tomorrow.”

The survey polled 605 multinational and local companies in 16 sectors with more than 427,000 employees, and is thought to be the largest and most comprehensive in Vietnam.  VNS

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If adopted, an increase in the region-based minimum wage for non-state employees next year will further pressurise local businesses, almost all of which are making efforts to deal with the aftermath of the global health crisis.

Inflation rate to remain stable but credit growth to slow: economist

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