Where will salaries see the best growth in 2016?
During 2016, employees worldwide can expect to see wages increase by an average of 2.5% in real terms. Of course, different countries can expect different levels of wage growth as well as variations in price inflation, which will reduce the purchasing power of any potential salary gains. So, if you’re looking to grow your salary in 2016, where should you head to enjoy the biggest wage increases?
This salary forecast from Korn Ferry Hay Group takes into account salary predictions from global HR departments as well as inflation predictions from the Economist Intelligence Unit to give an inflation-adjusted prediction for which countries will see the biggest growth in wages. In tenth place is India, where wages are expected to increase by 4.7 % in 2016. What’s more, with growth in China having slowed down in recent months, India is expected to be the fastest growing economy in the world this year according to The World Bank.
Wages are also set to see significant increases elsewhere in Asia. Despite slowing growth and a drop in overall trade last year, Chinese workers can expect to see their incomes rise by 6.3% in real terms. This is due to a continued demand for skilled workers as well as a growing middle class in the region.
The highest wage increases in Asia are expected to be seen in Vietnam however. Coming in at second place overall in the world table, the drive from authorities to create a more open and modernised economy is expected to start paying off, with wages predicted to grow by 7.3%.
Top of the list of wage increases, perhaps surprisingly, is Lebanon. Despite the social and economic impact of the crisis in neighbouring Syria, salaries in Lebanon are expected to increase by an enormous 11.5%. In recent years, the Lebanese economy has exceeded expectations for growth despite concerns about the stability of the region. There has been a general trend for wage increases in the Middle East and Lebanon is leading the way.
Workers in Europe can expect to see salaries increase by a more modest 2.3% overall in 2016. Inflation is expected to remain low across the region at 0.5% allowing workers to keep the majority of their pay increases. Eastern Europe is expected to enjoy higher increases than Western Europe, with wage increases of 2.9% and 2% respectively. Set to beat the averages for the region, Germany is expected to see a 2.7% increase in wages compared to 2.5% for the UK.
Just two countries in Europe made the top ten this year. Since joining the European Union in 2007, Romania’s economic output has grown significantly and this is expected to continue in 2016. Romania takes fifth place in the wage growth league table with an expected 5.4% increase in wages as forecasters expect the growth trend to continue. Lithuania also made the list in ninth place with wages expected to grow by 5%.
Of course, if you are considering a move abroad to improve your earning power, there are numerous other factors to consider besides predicted salary growth such as career progression, current wage levels and exchange rates. What these figures do provide though is a useful insight into where the up-and-coming worldwide destinations for expat employees are. If salaries continue to grow at these rates, these up-and-comers could end up being the expat favourites of the future.
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Information correct at time of publication.