Talent crunch will lead to skyrocketing salaries

Salaries for highly skilled workers could soar as talent shortages take hold across Asia Pacific, according to a new study by Korn Ferry.

Singapore can expect to pay an extra $29,065 per worker per year by 2030, making it the top five economies with the highest pay hike.

Hong Kong, on the other hand, faces a staggering annual wage premium of $40,539 per highly skilled worker.

The study found that by 2030, employers across the region would be forking out an extra $14,710 per year, on top of expected increases in inflation rates.

This expensive impact of the global talent crunch would especially affect employers in three sectors: financial and business services; technology, media and telecommunications; and manufacturing.

“The new era of work is one of scarcity in abundance: there are plenty of people, but not enough with the skills their organizations will need to survive,” said Dhritiman Chakrabarti, Head of Rewards and Benefits for the APAC region at Korn Ferry.

“While 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.”

The study suggests that if left unchecked, the salary surge could add more than $1 trillion to annual payrolls in the region by 2030, jeopardizing companies’ profitability and threatening business models.

“Buying in talent from the market is unsustainable. Instead, companies across Asia Pacific must focus on engaging and reskilling their current workers,” said Chakrabarti. “With existing highly skilled workers, leaders must focus on what really drives retention.

“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.”