HR March 2015

What are you worth?

This year, salaries in Japan will experience a gentle incline that’s unreflective of the need for talent, according to the 2015 Hays Salary Guide. Steady hiring demand will continue across most sectors and industries, but that does not mean salaries will reflect the level of demand.

Based on a survey of over 2,000 employers, representing some 4mn employees, the guide includes salary and recruiting trends for over 1,200 roles in Japan, China, Hong Kong, Singapore and Malaysia.

It shows that hiring expectations remain steady across Asia, despite the talent shortage. Employers are seeing a gap—some more significant than others—between the skills they are looking for and those available in the local labour market.

Despite this, candidates should not expect large salary increases that reflect this level of demand. In the last review employers carried out, 56% reportedly gave increases of less than 3%, while a further 15% gave no increase at all. Just 22% gave increases of 3–6%, while 7% increased salaries by 6% or more.

The situation is similar for the year ahead, with 59% of employers expecting to increase salaries by less than 3%, and a further 14% not intending to give their staff a pay raise. Some 20% of employers will increase salaries by 3–6%, while 7% will offer increases of 6% or more.

In Japan specifically, the guide shows that 27% of employees can expect a salary increase of 3% or more.

Instead of offering large salary increases, employers are offering extra benefits to help secure or retain top talent. Popular benefits in Japan are health (59%), pension (51%) and life assurance (25%).

Performance-related bonuses are also used to reward top performers. Some 51% of employers said they would award bonuses to more than half of their staff this year. In the majority of cases, these bonuses are related to employee performance (80%) and employer performance (73%).

This shows that, rather than give across-the-board salary increases, employers are using bonuses based on performance to reward their top talent. Just 11% of employers said bonuses are guaranteed.

In terms of the value of these bonuses, 44% of employers said they would award 11–50% of an employee’s salary as a bonus. Some 34% said bonuses would equate to less than 10% of an employee’s salary.

In other key findings, 72% of employers expect their level of business activity to increase in the year ahead, 48% expect permanent headcount to rise, and 45% said the skills shortage has the potential to hamper the effective operation of their business or department.

Maximising your salary increase
For candidates, there are great opportunities presented by the current market. Savvy job seekers are taking advantage of the tight talent market to secure roles offering career progression which, in the long term, will lead to a higher salary.

However if you are already in a role and want to maximise the value of your salary increase in your next review, preparation and evidence are the key steps to remember.

We suggest you first prepare a list of your recent achievements that exceed your objectives; you may need to look at your original job description. List any changes to the volume of your work, any additional duties you are now undertaking, and consider projects in which you have been involved.

Then, make a note of the benefits of your results to the firm. The aim here is to provide strong evidence to support the value you provide, so focus on outcomes.

Using a recent salary guide, research the salary you feel your performance and results are worth. This enables you to back up your request with evidence and demonstrate that the salary you are asking for is in line with current market rates.

Ask your manager for a meeting to review your salary. When it comes time for this meeting, keep it professional. Stay calm and focused. Do not become emotional or talk about how much money you need. Keep your review purely professional.

Have a fall-back position. If your employer cannot afford to increase your salary, can you agree a date for another pay review in three or six months? What about additional annual leave, study or other benefits?

Above all, use your accomplishments and the value you add to the organisation as the basis of your negotiation. In this way, you will clearly demonstrate your worth and be in a stronger position to secure the maximum of the salary increase on offer.