Mercer’s Total Remuneration Survey (TRS) 2023 has revealed that employees in Thailand can expect higher salaries in 2024. The TRS surveyed 617 organizations across seven industries in Thailand between April and June this year. The projected median merit salary increment for next year is 5%, up from 4.8% in 2023.
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Juckchai Boonyawat, President of Mercer Thailand, said: “Due to the robust recovery of domestic demand and the tourism sector, increased foreign direct investments, and stimulus policies from the new government, we expect a more positive economic landscape in Thailand for 2024. Continued growth will be gradual and stable.
Thailand’s projected median salary increment of 5% in 2024 falls slightly below the Asia average of 5.2%. This reflects the varying pay progression between emerging and developed economies in the region. India, Vietnam and Indonesia report the highest projected median salary increments in 2024 at 9.3%, 7.0% and 6.5% respectively, while Japan, Taiwan, and Hong Kong report the lowest at 2.6, 3.8% and 3.9% respectively. Other countries included in the survey are the Philippines at 5.7%, China at 5.2%, Malaysia at 5.1%, South Korea at 4.4% and Singapore at 4.2%.
Life Sciences, High Tech and Automotive industries project highest merit salary increases in Thailand
Merit salary increments are expected to rise across most industries, with the Life Sciences, High Tech and Automotive industries expecting to see the highest increases at 5% in 2024. The latter industry, for example, is expanding with more electric vehicles in the market and increased competition amongst automotive companies, giving rise to a higher demand for talent. Most of the industries are also projecting higher increases as compared to previous years, and the Life Insurance industry is the only sector that has projected a decrease of 4% from 4.2% in 2023.
Performance recognition is key for industries like High Tech, Life Sciences and Consumer Goods, as evident in their variable bonus payouts. At 68%, 61%, and 52% respectively, they have the biggest differences in payouts between employees who have met their target performance indicators and those who delivered outstanding performance (see Figure 1).
Higher voluntary attrition rate implies a loosening of Thailand’s labor market
Since 2020, Thailand’s voluntary attrition rate has been steadily increasing to 10% in 2023. Juckchai added: “With economic recovery underway in Thailand, companies are making investments to expand and seize new business opportunities. This has resulted in renewed demand for skilled talent. We have also observed that an ageing society has caused a leadership gap in firms, hence they see the need to embark on talent-buying strategies to address talent shortages.”
Derek Heng, CEO of Marsh McLennan Thailand, said: “Despite signs of loosening in the labor market, Thailand’s unemployment rate stands at 1.2% in the first half of 2023, which is one of the lowest in Southeast Asia and even globally. This demonstrates that employees here are actively seeking employment opportunities that will set them up for future career growth and better salary prospects. Hence, the ability to offer well-thought-out remuneration packages will be critical for employers and HR leaders to attract and retain valuable talent, especially in sectors that require specialized skillsets like High Tech and Life Sciences.”
