Jakarta. Many companies in Indonesia are either downsizing or freezing salary increases due to the impacts of a slowdown in the overall market, executive search and recruiting firm Korn Ferry said in a statement on Tuesday (19/12), citing its latest report.
The Los Angeles-headquartered company said in the statement that some specific industries, including industrial or manufacturing, plantation, mining, oil and energy, have seen slower business activities and to "grapple with the slow market, many organizations in Indonesia are either downsizing or freezing salary increases."
However, on a positive note, the government is focusing more on developing the infrastructure sector, which has enabled its "supporting industries to marginally recover and bring up the overall salary forecast numbers in the country."
Korn Ferry forecast Indonesia to see 3.4 percent real salary increase in 2018, higher than some neighboring Asian countries like Singapore (2.3 percent), the Philippines (2.8 percent) and Hong Kong (1.70 percent), but lower than Malaysia (3.5 percent), China (4.2 percent), Thailand (4.5 percent), Vietnam (4.6 percent) and India (4.7 percent).
Real salary increase is calculated after removing inflationary effects on purchasing power.
Korn Ferry's forecast was based on its pay database, which contains data for more than 20 million job holders in 25,000 organizations across more than 110 countries.
In Asia, the global consulting company forecast salaries to increase by 5.4 percent, less than last year's 6.1 percent increase.
"Inflation-adjusted real wage increases are expected to be 2.8 percent – the highest globally, but down from 4.3 percent last year. China remained consistent with real wage increases predicted at 4.2 percent for 2018, compared to 4 percent last year," it said in Tuesday's statement.
Most countries in Asia saw a drop in year-over-year real wage prediction increases for next year. This include Vietnam’s forecast of 4.6 percent for real salary increase, which was down from 7.2 percent in 2017 real salary increase, and Singapore at 2.3 percent (down from 4.7 percent).