Southeast Asian Firms Planned Higher 2027 Salary Budgets
Operators must account for rising labor costs as regional salary budgets climb to 5.2% for the coming year.
Updated on Sept. 23, 2026 in Remote Work
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Organizations across Southeast Asia have set salary increase budgets at 5.2% for 2027, rising from 5.0% in 2026. The shift impacts businesses navigating persistent inflation and ongoing skill shortages across the region.
Why it matters
The upward trend in salary budgets forces operators to adjust their cost structures to compete for talent amid skill gaps and high attrition. Firms are prioritizing investment in front-office and engineering roles to secure essential human capital.
Aon's analysis of 1,200 businesses revealed a 5.2% projected salary increase for 2027, up from 5.0% in 2026. Attrition remains a significant operational hurdle, with the consulting and business services sector reporting an attrition rate of 21.5%.
The players
Aon
A global professional services firm that provides risk, retirement, and health consulting for businesses.
The details
Companies are reallocating talent budgets specifically toward engineering and front-office functions to address high turnover rates. With regional turnover reaching 17.4% in Malaysia and 17.3% in the Philippines, organizations are using these salary adjustments as a primary tool to mitigate recruitment costs associated with frequent staff replacement.
Timeline
July 2026 to September 2026 was the period Aon conducted its salary and turnover study.
5.0% was the average regional salary increase during 2026.
5.2% is the projected average regional salary increase for 2027.
Market Landscape
This development follows the trends identified in the 2026 Salary Increase and Turnover Study, marking a continuation of competitive wage pressure. It reflects an industry-wide pivot where businesses are forced to trade headcount flexibility for the retention of critical technical talent.
Operators should review their 2027 payroll forecasts against these regional benchmarks to ensure competitive positioning. Failure to adjust for the 5.2% increase may accelerate attrition in technical and front-office departments where the competition for skills remains intense.
The takeaway
The sustained increase in salary budgets underscores the rising price of talent in a region defined by high attrition and skill scarcity. Leaders should track their turnover rates relative to the 21.5% attrition observed in service sectors to determine if current compensation strategies are successfully shielding their operational core.
Further reading
For broader trends in managing distributed teams and labor costs, see our coverage of Remote Work.
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