Written by Jos Bosmans, BMS Recruitment, for owners and general managers of SME’s who don’t have direct access to in-house HR advice.
Summary
On August 26, 2022, Thailand’s National Wage Committee raised the minimum wage in Bangkok to 353.- Baht per day — an increase of approximately 5%. In other provinces the minimum salaries will go up with a similar 5%. The new rates will take effect on October 1, 2022. The decision to boost minimum wages came after a 14-year-high headline inflation rate of 7.61% in July 2022.
All companies will have to mandatorily implement this increase.
THIS IS A FACT.
From there, you are confronted with 3 decisions:
- Do I increase my total salary bill with 5%?
- Do I go into this substantial cost uplift blindly without knowing where we stand today?
- Do I give everybody the same 5 % or do I use this opportunity to cleverly tie-in my business and people needs?
To Win in the Marketplace, You Must First Win in the Workplace – Doug Conant, CEO Campbell Soup
DECISION 1
Allocate a salary increase for staff already paid above the minimum rate or not?
The main inflation drivers are the cost of energy and of fresh foods. This affects all your employees: everybody is going backwards in spending power and for sure that is not their expectation.
Therefore, the 2023 round of salary increases will be critical to retain your best people and to keep them happy.
As the owner you will have to decide sooner rather than: people on the minimum rate will already enjoy higher wages from October onwards and your higher paid staff will be anxious to know what your plans are for them.
DECISION 2
What is the “right” increase?
“Right” depends on where you are in the salary market today: ”…to find where you are going, you must know where you are” (John Steinbeck).
It would be manifestly productive to know where you are in the salary market with your current salaries and make that annoying buzzing sound of uncertainty disappear.
BMS offers a dependable *salary assessment* of your CURRENT pay per individual position and of your CURRENT overall standing in the market
The report will provide:
- The lowest and the highest paid salaries for a particular position
- The place of each positions’ salary in the market by means of their calculated percentile.
- The aggregate for these positions is your standing in the market
DECISION 3
Allocate the same amount/percent to everybody?
It depends!
It hinges on your practice in the past and on the salary cost movement your company can afford, but keep in mind:
- Everybody will look forward to five percent as the minimum benchmark
- Your 2021 and 2022 increases can modulate and alleviate the 2023 effort (as the minimum wage was not increased during this period)
- Differentiation will only upset those that are getting less. Communication to those affected on why that is the case, will support your HR priorities.
Tough decisions – only if you go into them blindly.
Call or mail me if you want to have a word and get a second perspective based on 30 years of business and HR practice.
If you are interested in the *salary assessment*, text us for our dedicated brochure with a sample report and pricing.
Jos can be reached on jos@bmsrecruitment.co.th or chat on the LINE app:
