Southeast Asia Salaries to Rise in 2025, with Singapore and Thailand Trailing

Salaries across Southeast Asia are projected to see greater increases in 2025 compared to 2024, according to a report by professional services firm Aon. Conducted from July to September 2024, the study analyzed data from over 950 companies in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

The report highlighted that talent attraction and retention has become a critical challenge for organizations in the Asia-Pacific, rising from the ninth most significant risk in 2021 to the fourth in 2023, as per Aon’s Global Risk Management Survey.

“The anticipated salary hikes for 2025 remain higher than in 2024, even with expectations of a softer inflationary and interest rate environment,” said Rahul Chawla, Aon’s head of talent solutions for Southeast Asia. This trend underscores a mismatch between talent supply and demand that transcends inflationary pressures.

Several factors, including high demand for skilled talent, are driving the salary increases. For example, Southeast Asia has become a hotspot for technology companies establishing operations, particularly in Singapore. This influx of capital fuels the demand for skilled professionals to support growth.

Emerging skill sets, such as prompt engineering related to AI technologies like ChatGPT, are also reshaping the talent landscape. “These are skills that barely existed two years ago but are now in high demand,” noted Cheng Wan Hua, Aon’s director of talent analytics for Southeast Asia.

Projected Salary Increases by Country

• Vietnam: From 6.4% in 2024 to 6.7% in 2025.
• Indonesia: From 5.7% in 2024 to 6.3% in 2025.
• Philippines: From 5.4% in 2024 to 5.8% in 2025.
• Malaysia: Remaining steady at 5%.
• Thailand: Increasing from 4.4% in 2024 to 4.7% in 2025.
• Singapore: From 4.2% in 2024 to 4.4% in 2025.

Industry Trends
The technology and manufacturing sectors are forecasted to experience the highest average salary bumps at 5.8%. Other sectors, such as retail and life sciences, anticipate increases of around 5.4%. On the lower end, industries like energy, financial services, and transportation are projected to see more modest rises of 4.9%, 4.8%, and 4.1%, respectively.

Singapore and Thailand Lagging Behind

Both Singapore and Thailand are expected to see smaller increases compared to the regional average. Singapore’s status as a developed market, with lower inflation and slower GDP growth, contributes to its restrained wage growth, Chawla explained. Thailand faces slower economic growth and limited mobility of its talent pool due to language and deployment barriers, which constrain salary adjustments within the local market.

This regional trend reflects a shifting focus on competitive compensation as businesses strive to address the pressing challenge of talent acquisition and retention.