Korn Ferry 2019 Salary Forecast Shows Smaller Real-Wage Increases Across Most Parts of the World

A forecast issued today by Korn Ferry (NYSE: KFY) reveals that, adjusted for inflation, real-wage salaries globally are expected to grow only an average of 1.0 percent in 2019. This is down from a 1.5 percent prediction for 2018.

With inflation rising in most parts of the world, were seeing a cut in real-wage increases across the globe, said Bob Wesselkamper, Korn Ferry Global Head of Rewards and Benefits Solutions. The percentage of salary increase or decrease will vary by role, industry, country and region, but one thing is clear, on average, employees are not seeing the same real pay growth they did even one year ago.

Highest real wage growth in Asia

In Asia, salaries are forecast to increase by 5.6 percent, up from 5.4 percent last year. Inflation-adjusted real wage increases are expected to be 2.6 percent, the highest globally, but down from 2.8 percent last year.

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Chinas real-wage forecasted growth for 2019 weakened at 3.2 percent, down from 4.2 percent last year. Japan saw a real-wage prediction of 0.1 percent for 2019 compared to the 2018 prediction of 1.6 percent. Asian countries that saw year-over-year increases include Vietnams forecast of 4.8 percent, up from 4.6 percent last year, and Singapore˜s forecast of 3.0 percent, up from 2.3 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 6.6 percent in 2019. After taking inflation into account, real wages are forecast to rise by 2.0 percent, which is up from 1.4 percent last year. In Western Europe, workers are expected to see lower wage increases, with an average increase of 2.5 percent, and inflation-adjusted real wage increases of 0.7 percent. This is down from the predicted 0.9 percent real-wage growth of last year.

Wages are predicted to increase 2.5 percent in the United Kingdom. Combined with a 1.9 percent inflation rate, real wages are expected to increase by 0.6 percent. This is up more than a percentage point from 2018, when wages were predicted to decrease by -0.5 percent. Employees in two of Europes largest economies, France and Germany, are forecast to see real-wage rises of 0.5 percent and 1.0 percent respectively.

North America Lagging

In North America, the average salary growth is predicted to be 2.8 percent in 2019, and when adjusted for inflation, the real-wage growth is expected to be 0.6 percent.

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 2.4 percent inflation rate in 2019, the real wage increase is forecast to be 0.6 percent, down from last years 1.0 percent. Canadian workers will see salaries increase by 2.6 percent, and with inflation at 2.0 percent, will also experience real-wage growth of 0.6 percent.

Inflation Tempers Salary Growth in Africa

Although top-line salaries will increase by 7.7 percent in Africa, high inflation means the real increase is predicted to be only 0.9 percent. In Egypt, salaries are expected to increase by 15 percent, but a 14.4 percent inflation rate means employees will only see a 0.6 percent real-wage increase.

Latin America Sees Year-Over-Year Drop in Real Wage Growth

Employees in Latin America are forecast to see a 4.6 percent gain in wages. With inflation, the real-wage increase in the region is expected to be 1.3 percent. This is down from 2.1 percent real-wage growth predictions from last year.

In Colombia, inflation is expected to be 2.9 percent for 2019. With a salary increase projected at 5.0 percent, this puts real wages for Colombia up 2.1 percent. In Brazil, the expected salary increase is 4.2 percent, and with 4.3 percent inflation, workers are expected to see a -0.1 percent decrease in real wages.

Middle East Sees Second-Lowest Real Salary Increase

In the Middle East, wages are expected to increase by 3.6 percent, compared to 3.8 percent last year. Inflation-adjusted wage increases are predicted to be 0.4 percent, compared to 0.9 percent last year and 2.5 percent the year before. Things are looking better in the UAE this year, with an inflation rate of 3.2 percent combined with pay increases of 3.9 percent, which means that real wages are expected to increase by 0.7 percent. Last year real wages were predicted to fall by -0.5 percent.

Qatar and Lebanon are both predicted to see a drop in real wages, with Qatar forecast to have a -0.5 percent loss in real wages, and Lebanon to have a -1.7 loss in real wages. This is compared to 1.8 percent growth in Lebanon last year and a 6.1 percent growth the year before.

The Pacific Sees the Lowest Real Salary Increase

Wages in the Pacific are forecast to grow by 2.5 percent, and adjusted for inflation, the rise in real wages is predicted to be 0.3 percent. Australia will see a 2.5 percent top-line growth, a 2.3 percent inflation rate, and a 0.2 percent real wage increase. In New Zealand, a 2.5 percent salary increase is forecast, and with 2.2 percent inflation, is expected to see a 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, said Benjamin Frost, Korn Ferrys 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 Ferrys pay database which contains data for more than 20 million job holders in 25,000 organizations across more than 110 countries.

It shows predicted salary increases, as forecasted by global HR leaders, for 2019 and compares them to predictions made at this time last year regarding 2018. It also compares them to 2019 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.

Editors Note: Global and regional averages exclude Argentina due to its particularly high inflation.

Region

 

Country

 

2019 Salary Forecast

 

2019 Inflation forecast

 

“Real” salary forecast

 

2018 Salary forecast

 

2018 “real” increase prediction

Africa Algeria 6.8% 6.4% 0.4% 6.5% 0.8%
Latin America Argentina 27.0% 35.3% -8.3% 21.9% 7.3%
East Europe Armenia 5.3% 3.2% 2.1% 5.3% 2.0%
Pacific Australia 2.5% 2.3% 0.2% 2.5% 0.4%
West Europe Austria 3.0% 2.0% 1.0% 2.5% 0.8%
East Europe Azerbaijan 8.0% 4.1% 3.9% 10.0% 4.8%
Middle East Bahrain 3.0% 3.8% -0.8% 4.0% 1.9%
East Europe Belarus 8.1% 5.3% 2.8% 10.2% -0.3%
West Europe Belgium 3.0% 2.2% 0.8% 3.0% 1.3%
Latin America Bolivia 5.5% 3.2% 2.3% 6.8% 2.4%
Africa Botswana 4.8% 4.0% 0.8% 4.7% 0.7%
Latin America Brazil 4.2% 4.3% -0.1% 7.3% 3.3%
East Europe Bulgaria 4.4% 3.2% 1.2% 3.8% 1.8%
North America Canada 2.6% 2.0% 0.6% 2.6% 0.9%
Latin America Chile 5.0% 3.2% 1.8% 4.8% 2.1%
Asia China 6.0% 2.8% 3.2% 6.0% 4.2%
Latin America Colombia 5.0% 2.9% 2.1% 5.3% 2.6%
Latin America Costa Rica 3.0% 4.2% -1.2% 3.7% 0.4%
East Europe Croatia 2.9% 1.5% 1.4% 2.8% 1.0%
West Europe Cyprus 2.9% 1.5% 1.4% 3.7% 2.4%
East Europe Czech Republic 4.7% 2.1% 2.6% 3.9% 1.9%
West Europe Denmark 2.4% 1.3% 1.1% 2.0% 0.1%
Latin America Dominican Republic 5.0% 4.3% 0.7% 5.1% 1.3%
Latin America Ecuador 2.5% 1.5% 1.0% 5.0% 4.4%
Africa Egypt 15.0% 14.4% 0.6% 15.0% -3.8%
Latin America El Salvador 4.5% 1.6% 2.9% 3.7% 2.2%
East Europe Estonia 4.1% 3.3% 0.8% 3.5% 0.5%
West Europe Finland 1.8% 1.8% 0.0% 1.0% -0.2%
West Europe France 2.0% 1.5% 0.5% 2.0% 0.7%
East Europe Georgia 5.8% 3.3% 2.5% 5.7% 2.6%
West Europe Germany 3.0% 2.0% 1.0% 2.4% 0.8%
Africa Ghana 13.6% 10.0% 3.6% 15.6% 5.9%
West Europe Greece 2.0% 1.2% 0.8% 2.0% 1.0%
Latin America Guatemala 5.0% 4.2% 0.8% 4.7% 0.0%
Latin America Honduras 6.1% 4.6% 1.5% 5.1% 1.0%
Asia Hong Kong, China 4.0% 2.3% 1.7% 4.0% 1.7%
East Europe Hungary 5.3% 3.3% 2.0% 4.6% 1.7%
Asia India 10.0% 5.0% 5.0% 9.0% 4.7%
Asia Indonesia 7.8% 4.1% 3.7% 8.0% 3.4%
West Europe Ireland 2.5% 1.4% 1.1% 2.3% 2.0%
West Europe Italy 2.2% 1.4% 0.8% 2.7% 1.8%
Asia Japan 2.0% 1.9% 0.1% 2.0% 1.6%
Middle East Jordan 4.0% 3.7% 0.3% 4.0% 1.6%
East Europe Kazakhstan 8.4% 6.6% 1.8% 9.0% 2.8%
Africa Kenya 6.6% 6.2% 0.4% 7.5% 1.0%
Asia Korea 4.5% 1.7% 2.8% 4.5% 2.8%
Middle East Kuwait 3.8% 1.6% 2.2% 4.3% 0.7%
East Europe Latvia 4.9% 2.7% 2.2% 4.0% 1.0%
Middle East Lebanon 3.0% 4.7% -1.7% 5.0% 1.8%
East Europe Lithuania 5.0% 3.0% 2.0% 5.0% 2.2%
West Europe Luxembourg 3.2% 1.9% 1.3% 2.6% 1.0%
Asia Malaysia 5.0% 1.4% 3.6% 6.0% 3.5%
Africa Mauritius 4.1% 4.6% -0.5% 4.2% 2.9%
Latin America Mexico 5.5% 4.4% 1.1% 4.6% 0.7%
Africa Morocco 3.7% 1.3% 2.4% 3.8% 2.6%
Africa Mozambique 7.8% 6.1% 1.7% 10.0% 3.5%
Africa Namibia 6.6% 5.4% 1.2% 7.0% 1.2%
West Europe Netherlands 3.0% 2.5% 0.5% 2.6% 1.2%
Pacific New Zealand 2.5% 2.2% 0.3% 2.5% 1.0%
Latin America Nicaragua 6.6% 3.9% 2.7% 6.6% 2.1%
Africa Nigeria 11.0% 13.6% -2.6% 10.8% -3.2%
West Europe Norway 3.0% 2.1% 0.9% 2.5% 0.7%
Middle East Oman 3.0% 3.0% 0.0% 3.0% 0.8%
Latin America Panama 3.2% 1.7% 1.5% 3.0% 1.6%
Asia Papua New Guinea 5.0% 6.2% -1.2% 4.0% -2.6%
Latin America Peru 4.0% 2.7% 1.3% 4.3% 1.5%
Asia Philippines 5.8% 4.5% 1.3% 5.0% 2.8%
East Europe Poland 4.0% 2.0% 2.0% 3.5% 1.3%
West Europe Portugal 2.1% 1.8% 0.3% 2.0% 0.7%
Middle East Qatar 3.3% 3.8% -0.5% 3.7% 1.1%
East Europe Romania 5.1% 3.5% 1.6% 5.0% 2.5%
East Europe Russian Federation 5.8% 4.5% 1.3% 7.0% 3.0%
Middle East Saudi Arabia 4.9% 2.3% 2.6% 3.2% 0.1%
East Europe Serbia 4.1% 2.7% 1.4% 4.8% 2.1%
Asia Singapore 4.0% 1.0% 3.0% 3.7% 2.3%
East Europe Slovakia 4.1% 2.3% 1.8% 3.0% 1.3%
Africa South Africa 6.5% 5.5% 1.0% 7.0% 1.6%
West Europe Spain 2.4% 1.8% 0.6% 2.0% 1.0%
West Europe Sweden 2.0% 1.9% 0.1% 2.0% 0.2%
West Europe Switzerland 1.5% 1.3% 0.2% 1.7% 1.1%
Asia Taiwan, China 3.9% 1.5% 2.4% 4.0% 3.3%
Africa Tanzania 6.1% 4.8% 1.3% 7.9% 2.7%
Asia Thailand 5.5% 1.6% 3.9% 5.5% 4.5%
Africa Tunisia 8.0% 5.0% 3.0% 7.1% 2.2%
East Europe Turkey 20.0% 14.5% 5.5% 9.0% 1.0%
Africa Uganda 6.2% 5.1% 1.1% 8.0% 2.5%
East Europe Ukraine 14.0% 8.1% 5.9% 15.0% 4.4%
Middle East United Arab Emirates 3.9% 3.2% 0.7% 4.1% -0.5%
West Europe United Kingdom 2.5% 1.9% 0.6% 2.0% -0.5%
North America United States of America 3.0% 2.4% 0.6% 3.0% 1.0%
East Europe Uzbekistan 8.0% 12.5% -4.5% 7.3% -7.7%
Asia Vietnam 8.8% 4.0% 4.8% 8.6% 4.6%
Africa Zambia 9.0% 9.8% -0.8% 12.3% 5.4%

About Korn Ferry

Korn Ferry is a global organizational consulting firm. We help clients synchronize strategy and talent to drive superior performance. We work with organizations to design their structures, roles, and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop, and motivate their people.

Korn Ferry
Tracy Kurschner
[email protected]
612.309.3957