Employers becoming more strategic amid global economic uncertainty
Projected salary increase budgets among employers in the Asia-Pacific region have slightly increased for 2026 as organisations take a cautious and strategic approach amid global economic uncertainty.
WTW's latest Salary Budget Planning Report revealed that the average salary increase budgets among APAC employers are expected to be 5.2%, up slightly from 5.1% in 2025.
By market, India saw the highest projected salary increase at nine per cent, followed by Vietnam (7.0%) and then Indonesia (6.1%).
In Singapore, employers are expecting their salary increase budgets to remain at four per cent in 2026, unchanged since 2024.
Employers becoming more strategic
According to WTW, their findings reflect a cautious approach taken by organisations amid current global economic uncertainties.
"Although overall budgets remain stable, the real transformation is happening behind the scenes," said Gary Goh, Rewards Data Intelligence Practice Leader, Singapore at WTW, in a statement.
WTW found that two out of five organisations have seen a lower salary budget since the last pay cycle, while 15% are projecting higher salary increase budgets.
The tight labour market has been cited as the top reason (22%) for the increase, followed by inflationary pressures (16%) and recalibrated pay due to lower increases in prior years (16%).
"Employers are becoming more strategic in how they distribute compensation, prioritise investments and define the results they aim to achieve," Goh said.
"Rather than simply reacting to economic trends, companies are proactively reshaping their approach to better align with broader business objectives, even in uncertain times."
Increasing headcount
Meanwhile, the report also found that 82% of employers in Singapore are planning to maintain their headcount within the next 12 months.
On the other hand, 12% are planning to increase their headcount, while six per cent are planning to reduce it.
These plans come as 66% of employers indicated that there are no or slight problems in attracting and retaining employees this year, up from 58% in 2023.
To support employees' needs, the report found that employers are taking other measures in addition to salary increases to mitigate labour costs. These measures include:
- Improving employee experience (78%)
- Increasing training opportunities (68%)
- Broader emphasis on diversity, equity and inclusion (60%)
- Enhancing wellness benefits (53%)
"In a complex labour market marked by global economic challenges, employers are hedging against rising labour costs by proactively deepening investments in areas such as career development, health and wellbeing," Goh said.
"These actions have significant potential for long-lasting benefits to help address companies’ mid- to longer-term talent needs and establish a resilient workforce as they continue to traverse these unpredictable times."
