Korn Ferry 2020 Salary Forecast Shows Slowing Inflation Makes for Higher Real-Wage Increases Across Most Parts of the World
LOS ANGELES--(BUSINESS WIRE)-- 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
|
Inflation |
Real
|
|
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20191119005039/en/
Tracy Kurschner
Tracy.Kurschner@KornFerry.com
612.309.3957
Source: Korn Ferry
Released November 19, 2019
