KUALA LUMPUR (May 16):  Salaries in Malaysia are set to rise by about 5.7% this year, inflation according to a survey conducted by professional services company Towers Watson.

In a statement Friday, the company said salaries across Asia-Pacific were set to rise an average 6.9% in 2014, with China leading the way while Japan is expected to see no increases.

It said region-wide salary increases forecast for 2014 were similar to that in 2013, and down from an earlier forecast in September 2013 of 7.1%.

The Towers Watson 2013-14 Asia-Pacific Salary Budget Planning Report drew on approximately 2,000 sets of responses covering 18 countries in the Asia-Pacific region.

Towers Watson said the survey included about 400 different companies, some of which responded for multiple countries where they have a presence.

The survey was set against a regional backdrop of annual inflation little changed from 2013 at 4.1%, stronger economic growth, and a decline in the overall unemployment rate.

It said salaries in China and Cambodia were forecast to rise 8% before inflation is taken into account – after inflation is built in, average increases are forecast at 5.2% and 4.1% respectively.

“Elsewhere in the region, salaries in Vietnam are set to rise 11.5%, Indonesia 9.6% and Malaysia 5.7%, while salaries in Hong Kong and Singapore are forecast to go up 4.5% and 4.3% respectively, Pakistan (13%) and India (10%) are expected to see the biggest increases, while New Zealand (3%) and Japan (2.3%) will see the lowest,” it said.

Towers Watson data services practice leader Sambhav Rakyan said in most cases, the company had revised its salary forecasts modestly lower from its forecasts back in October 2013 mostly because clients now had a much better sense of the 2014 actual budgets and inflation is expected to be lower than previously thought.

Inflation across the region in 2014 is forecast at 4.1%[1], unchanged from 2013, but down from an earlier forecast of 4.2%.

Rakyan said the findings supported the view that for companies in Asia-Pacific finding and retaining suitably skilled staff remained a challenge.

“The expected raises for production or blue-collar workers in China, Hong Kong, India, Indonesia, South Korea and Thailand show growing pressure to find such staff,” he said.