Decoding pay for digital talent in Asia Pacific

While organisations are taking a conservative outlook when it comes to their headcount expansion plans, the market for digital talent in Asia Pacific continues to be robust. In fact, organisations are reporting that they are struggling to hire digital talent this year as compared to 2022 (Figure 1).

More than half of the organisations surveyed reported that they struggle to recruit or retain engineers and digital talent this year as compared to 2022, reflecting the dire need for digital talent in the region. Take the example of the role of software engineer: In the technology, media and gaming (TMG) and financial services sectors, the role of software engineer holds the top spot in the top 10 jobs in demand. It is also one of the top 10 jobs in demand for retail and biopharma and life sciences sectors.

Therefore, organisations in the TMG industry have started to restructure their compensation practices as they find themselves competing with a wider range of industries for digital talent. Let us take a closer look at how compensation practices are changing for some technology-related roles across key markets in Asia Pacific.

Pay trends for digital talent across different Asia Pacific markets

TMG companies in Asia Pacific are either raising allowances or increasing the base pay of digital talent for 2023, according to our 2023 APAC TMG Compensation Survey. Each market has its own story depending on the local tech industry (Figure 2).

Robust pay growth in IT development field

When it comes to pay trends within disciplines in the digital field, IT development deserves a closer look. The ATC movement for roles in IT development in Asia Pacific increased by 18% from 2020 to 2023, while the ATC for all other functions in the TMG industry only rose by 14% (Figure 3).

This is because IT development-related jobs remain one of the most sought-after roles across several industries. Further, the ATC market movement for the IT development function in the Philippines has the highest increase rate for 2023. These factors have driven salary changes for the field of IT development in comparison with other functions in the TMG industry.

Within the field of IT development, the role of AI engineer in the Career Level P3 also has a higher compensation profile as compared to its counterparts within the TMG sector (Figure 4).

Source: 2020-2023 WTW TMG Compensation Report-China (Shanghai), India, Singapore, Taiwan, US

The compensation profile for AI engineers has been primarily candidate-driven due to the strong demand that the role currently enjoys. The ATC level for AI engineers is expected to be 27% higher compared to all other TMG functions in the P3 level. Also, the market movement of the ATC for AI engineers is 10% from 2022 to 2023 while this is only 4% for all other TMG functions.

Enhancing rewards for those who are starting in their careers

These current market conditions for experienced tech talent have prompted organisations to take a combination of actions to ensure that pay for those who are early in their careers remains competitive (Figure 5).

Special pay increase or pay structure adjustment (17%) tends to be the most popular measure used by organisations to attract and retain tech talent due to the strong demand for their skillset across different industries in Asia Pacific, according to our 2023 Tech Pay Action Survey. This is followed by other actions (14%) that pertain to benefits and learning and development opportunities to encourage young talent to stay in the organisation for the long haul. It can be seen from these results that companies are leveraging both monetary and non-monetary measures to thrive in the current tight market for digital talent.

The way forward

The trends we have identified show how important it is for businesses to stay alert since economic, technological and geopolitical events can rapidly change the employment landscape. As digital talent becomes more in demand across a wide range of industries, organisations should take on a proactive approach toward their headcount and workforce planning. Some organisations are already taking different steps to provide competitive pay for those who are early in their career. Given that there isn’t a one-size-fits-all approach, it is vital that you only take the steps that will work for your business through the help of comprehensive market data to formulate the effective talent and rewards strategy that will draw the right people to your organisation and help your business become agile in a competitive labour market.