Which country in Asia pays the best for senior executives? According to the latest survey conducted by Towers Watson, a global professional services company, that will be Singapore.
The 2013/2014 Global 50 Remuneration Planning Report, available for purchase online, is a comprehensive global compensation and benefits planning tool for companies operating in disparate markets and multicultural legislative environments, says Towers Watson. Wide gaps in pay across the spectrum of job levels reflect workforce imbalances and pressure for talent in the Asia Pacific region, the survey indicates, but depending on location, skilled labour at low cost is available to potential employers.
Pay levels in Singapore at senior management outstrip those of Japan and, more so, Hong Kong. Across the board, remuneration levels in Singapore exceed those of Hong Kong by as much as 14 percent at senior executive level to 34 percent for top management.
"Growth in private banking in Singapore and its development—or regeneration—as a regional hub for international companies has drawn a lot of high-level talent to the city and that's reflected in the C-suite compensation," said Sambhav Rakyan, Data Services practice leader, Asia Pacific at Towers Watson. "That said, we're looking at pre-tax remuneration in this survey—and, when that's taken into account, Hong Kong's attractive tax rates do go some way towards offsetting the differential."
Towers Watson forecasts average salary increases in both cities to be 4.5 percent this year. However, Hong Kong's top marginal tax rate on personal income is more favourable at 15 percent, compared to Singapore's 20 percent.
Pay levels in China lags that of Hong Kong across most of the job categories, but at senior management level, there is convergence. At top management, remuneration is 11 percent more in China (average of US$215,000) than in Hong Kong (US$193,000), according to the Towers Watson report.
The report also shows that pay for senior management has risen in China over the past few years because of a shortage of talent at this management level, implying that top-level pay in China is comparable to that elsewhere in the world.
Moreover, there is widening disparity in pay levels particularly between the middle management and CEO in 13 of the Asia Pacific's key developed and developing economies. The findings illustrate where in the region senior executive talent shortage is most acute and also the competitiveness of pay amongst rival economies—from production worker to top management.
At the lower end of the job level Asia Pacific's developed economies predictably have the highest pay levels: Australia's entry pay level is 8-11 times more than China, the Philippines and Indonesia, and 15 times that of Vietnam. Australia also pays discernibly higher than Japan, Singapore and Hong Kong through to middle management, after which the gap narrows.