Workers are more inclined to stay amidst hefty paychecks.
Salary premiums in small markets with limited workforces like Hong Kong may hit up to $40,539 annually per highly skilled worker by 2030 in an effort to retain sought-after skilled workers, according to consulting firm Korn Ferry.
Pay premiums are what employes may have to pay over and above the amount that sarlies would rise over time due to normal inflation.
“Whilst overall wage increases are just keeping pace with inflation, salaries for in-demand workers will skyrocket if companies choose to compete for the best and brightest on salary alone,” Bob Wesselkamper, Global Head of Korn Ferry Rewards and Benefits Solutions in a statement.
Hong Kong alongside Singapore could expect salary premiums equivalent to more than 10% of their 2017 GDP, as companies beef up their payrolls to keep high-demand workers and hiring is out of the picture.
The salary increase is also set to hammer US and Japanese companies hard with US facing a wage premium of over $531b by 2030 whilst Japan may bear up to $468b.
On the other hand, the UK and France face a rosier short-term outlook as higher salaries may only carve out up to 5% and 4% of 2017 GDP but still indicates a massive cost companies must bear to keep talent.
“Buying in talent from the market is unsustainable. Instead, companies must focus on engaging and reskilling their current workers,” said Alan Guarino, vice chairman, Korn Ferry CEO and Board Services. “We know that employees who have the opportunity for career development, benefit from inspiring leadership and feel their work has purpose are more likely to stay at an organization, and—crucially—will be more engaged and productive.”
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