A forecast issued today by Korn Ferry (NYSE: KFY) reveals that
while 2020 salary increases across the globe are expected to grow
at about the same rate as 2019, slowing inflation will mean an
increase in real-wage salary growth.
Salaries are predicted to grow at a rate of 4.9 percent globally
in 2020. With a global inflation rate prediction of approximately
2.8 percent, that puts the real-wage salary increase prediction at
2.1 percent. In 2019, the salary growth rate was 5.1 percent. With
global inflation at 4.1 percent, that meant 2019 real-wage salary
increases across the globe were only 1.0 percent
“There is good news for workers in these numbers given real-wage
growth is projected to be higher than 2019. But the lower rate of
inflation embedded in the numbers may also foreshadow expectations
of a stalling economy in several key countries, which could in turn
lead to higher rates of unemployment,” says Don Lowman, Korn Ferry
Global Leader, Rewards and Benefits.
Slower Inflation Rate Boosts North America Real Wages
Slightly
In North America, the average salary growth is predicted to be
2.8 percent in 2020, which is the same as last year. When adjusted
for inflation, the real-wage growth is expected to be 1.1 percent,
up from 0.6 percent last year.
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 1.6 percent inflation rate in 2020, the
real wage increase is forecast to be 1.4 percent, up from last
year’s 0.6 percent. Canadian workers will see salaries increase by
2.6 percent, which is the same as last year. With inflation
predicted at 1.9 percent, the real-wage predicted increase is 0.7
percent, up from last year’s 0.6 percent.
Highest real-wage growth in Asia
In Asia, salaries are forecast to grow by 5.3 percent in 2020.
With an inflation rate of 2.2 percent, real-wage salaries are
expected to be 3.1 percent. That’s up from a real-wage increase of
2.6 percent last year.
China’s real-wage forecasted growth for 2020 weakened to 2.9
percent, down from 3.2 percent last year and 4.2 percent the year
before. Japan saw a real-wage prediction of 0.6 percent, up from
last year’s prediction of 0.1 percent. Singapore's forecast of 3.6
percent real-wage increases is up from 3.0 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 6.2 percent in
2020. After taking inflation into account, real wages are forecast
to rise by 2.6 percent, which is up from 2.0 percent last year. In
Western Europe, workers are expected to see an average increase of
2.5 percent, and inflation-adjusted real wage increases of 1.2
percent. That is up from 0.7 percent real-wage growth of last
year.
Wages are predicted to increase 2.5 percent in the United
Kingdom. Combined with a 2.1 percent inflation rate, real wages are
expected to increase by 0.4 percent. That is very close to last
year’s real-wage increase of 0.6 percent. Employees in two of
Europe’s largest economies, France and Germany, are forecast to see
real-wage rises of 0.6 percent and 1.4 percent respectively.
Slower Inflation Helps Salary Growth in Africa
Top-line salaries in Africa are predicted to increase by 7.9
percent in 2020, and the real-wage increase is predicted to be 2.3
percent. That’s up from 0.9 percent last year. In Egypt, salaries
are expected to increase by 13.5 percent, and with a 6.9 percent
inflation rate, employees will see a 6.6 percent real-wage
increase. That’s up from last year’s 0.6 percent real-wage
increase.
Latin America Sees Mixed Year-Over-Year Real Wage
Growth
Employees in Latin America are forecast to see a 4.9 percent
gain in wages. With inflation, the real-wage increase in the region
is expected to be 2.0 percent, up from last year’s 1.3 percent.
In Colombia, inflation is expected to be 3.2 percent for 2020.
With a salary increase projected at 4.5 percent, this puts real
wage growth for Colombia at 1.3 percent. That’s lower than last
year’s 2.1 percent. In Brazil, the expected salary increase is 5.3
percent, and with 3.7 percent inflation, workers are expected to
see 1.6 percent increase in real wages. That’s up from a -0.1
percent decrease in real wages last year.
Middle East Sees Higher Real-Salary Increase
In the Middle East, wages are expected to increase by 3.6
percent in 2020, which is the same as last year. However, slower
inflation means the real-wage increase is predicted at 1.6 percent,
up from 0.4 percent last year.
In the UAE salaries are predicted to increase 3.5 percent in
2020, and with an inflation rate of 1.0 percent, real wages are
predicted to grow by 2.5 percent. That’s up from 0.7 percent last
year. Qatar is forecast to have a 3.0 percent salary increase with
an inflation-adjusted increase of 0.5 percent. That compares to a
-0.5 percent loss in real wages last year.
The Pacific Sees the Lowest Real Salary Increase
Wages in the Pacific are forecast to grow by 2.5 percent in
2020, which is the same as last year. Adjusted for inflation, the
rise in real wages is predicted to be 0.8 percent, which is up from
last year’s 0.3 percent.
Australia will see a 2.5 percent top-line growth, which is the
same as last year. With a 1.5 percent inflation rate, a 1.0 percent
real-wage increase is predicted. That’s up from 0.2 percent last
year. In New Zealand, a 2.5 percent salary increase is also
forecast, and with 1.9 percent predicted inflation rate, the real
salary increase is expected to be 0.6 percent, which is up from
last year’s 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,” says
Benjamin Frost, Korn Ferry 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 130 countries.
It shows predicted salary increases, as forecasted by global HR
leaders, for 2020 and compares them to predictions made at this
time last year regarding 2019. It also compares them to 2020
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.
Region
Country
Headline Forecast
Inflation
Real Forecast
Africa
Algeria
6.4%
3.4%
3.0%
Africa
Egypt
13.5%
6.9%
6.6%
Africa
Ghana
11.0%
8.1%
2.9%
Africa
Mauritius
4.0%
3.9%
0.1%
Africa
Morocco
3.9%
0.0%
3.9%
Africa
Namibia
5.5%
4.4%
1.1%
Africa
Nigeria
13.1%
11.3%
1.8%
Africa
South Africa
6.8%
5.1%
1.7%
Africa
Tanzania
6.6%
3.8%
2.8%
Africa
Tunisia
8.6%
6.1%
2.5%
Africa
Zambia
7.9%
8.7%
-0.8%
Asia
China
6.0%
3.1%
2.9%
Asia
Hong Kong, China
4.0%
2.6%
1.4%
Asia
India
9.2%
4.2%
5.0%
Asia
Indonesia
8.1%
3.0%
5.1%
Asia
Japan
2.0%
1.4%
0.6%
Asia
Korea
4.1%
1.2%
2.9%
Asia
Malaysia
5.0%
1.5%
3.5%
Asia
Papua New Guinea
4.0%
3.8%
0.2%
Asia
Philippines
5.9%
2.4%
3.5%
Asia
Singapore
4.0%
0.4%
3.6%
Asia
Taiwan, China
3.9%
0.2%
3.7%
Asia
Thailand
5.0%
1.3%
3.7%
Asia
Vietnam
7.7%
3.1%
4.6%
East Europe
Albania
2.6%
1.9%
0.7%
East Europe
Belarus
7.6%
5.4%
2.2%
East Europe
Bulgaria
4.3%
2.6%
1.7%
East Europe
Czech Republic
4.1%
2.1%
2.0%
East Europe
Estonia
5.0%
2.2%
2.8%
East Europe
Hungary
5.1%
2.9%
2.2%
East Europe
Kazakhstan
7.0%
5.1%
1.9%
East Europe
Latvia
4.6%
2.8%
1.8%
East Europe
Lithuania
5.0%
2.2%
2.8%
East Europe
Poland
4.4%
2.2%
2.2%
East Europe
Romania
5.3%
3.1%
2.2%
East Europe
Russian Federation
5.1%
4.2%
0.9%
East Europe
Serbia
2.7%
2.0%
0.7%
East Europe
Slovakia
4.0%
2.1%
1.9%
East Europe
Turkey
18.0%
10.1%
7.9%
East Europe
Ukraine
15.0%
7.7%
7.3%
Latin America
Argentina
37.5%
44.3%
-6.8%
Latin America
Bolivia
5.9%
3.2%
2.7%
Latin America
Brazil
5.3%
3.7%
1.6%
Latin America
Chile
4.7%
2.7%
2.0%
Latin America
Colombia
4.5%
3.2%
1.3%
Latin America
Costa Rica
3.7%
2.7%
1.0%
Latin America
Dominican Republic
5.0%
2.0%
3.0%
Latin America
Ecuador
4.0%
1.5%
2.5%
Latin America
El Salvador
2.6%
0.2%
2.4%
Latin America
Guatemala
5.0%
3.2%
1.8%
Latin America
Honduras
6.0%
3.9%
2.1%
Latin America
Mexico
5.0%
3.3%
1.7%
Latin America
Nicaragua
5.0%
4.4%
0.6%
Latin America
Panama
4.0%
0.7%
3.3%
Latin America
Paraguay
7.4%
3.0%
4.4%
Latin America
Peru
4.5%
2.0%
2.5%
Latin America
Uruguay
5.8%
6.9%
-1.1%
Middle East
Bahrain
3.9%
1.2%
2.7%
Middle East
Jordan
5.0%
2.0%
3.0%
Middle East
Kuwait
3.4%
1.7%
1.7%
Middle East
Lebanon
3.0%
3.5%
-0.5%
Middle East
Oman
3.0%
1.9%
1.1%
Middle East
Qatar
3.0%
2.5%
0.5%
Middle East
Saudi Arabia
4.0%
2.0%
2.0%
Middle East
United Arab Emirates
3.5%
1.0%
2.5%
North America
Canada
2.6%
1.9%
0.7%
North America
United States of America
3.0%
1.6%
1.4%
Pacific
Australia
2.5%
1.5%
1.0%
Pacific
New Zealand
2.5%
1.9%
0.6%
West Europe
Austria
3.0%
1.7%
1.3%
West Europe
Belgium
3.0%
1.7%
1.3%
West Europe
Cyprus
2.5%
0.7%
1.8%
West Europe
Denmark
2.4%
1.0%
1.4%
West Europe
Finland
2.0%
1.2%
0.8%
West Europe
France
2.0%
1.4%
0.6%
West Europe
Germany
2.9%
1.5%
1.4%
West Europe
Greece
2.0%
1.1%
0.9%
West Europe
Ireland
2.5%
0.5%
2.0%
West Europe
Italy
2.3%
0.5%
1.8%
West Europe
Luxembourg
3.6%
1.9%
1.7%
West Europe
Netherlands
3.4%
1.8%
1.6%
West Europe
Norway
3.0%
2.2%
0.8%
West Europe
Portugal
2.0%
0.5%
1.5%
West Europe
Spain
2.4%
1.3%
1.1%
West Europe
Sweden
2.0%
1.6%
0.4%
West Europe
Switzerland
1.5%
0.8%
0.7%
West Europe
United Kingdom
2.5%
2.1%
0.4%
Editor’s Note: Global and regional averages exclude
Argentina due to its particularly high inflation.
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We work
with clients to design their organizational structures, roles and
responsibilities. We help them hire the right people and advise
them on how to reward, develop and motivate their workforce. And,
we help professionals navigate and advance their careers.
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version on businesswire.com: https://www.businesswire.com/news/home/20191119005039/en/
Tracy Kurschner Tracy.Kurschner@KornFerry.com 612.309.3957
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