Salary year-over-year increase rate stays 2.2%, the lowest since 2015 -- Japanese companies in the U.S.

• Report

We saw interesting changes in the latest results from "The Survey of Salaries and Employment Benefits for Local Staff in Japanese Companies", U.S. edition.

The average local staff salary increase rate in the U.S. for the fiscal year 2020 was 2.2%, a 1.0 point decline from the previous year. While the increase rate held above 3% for four consecutive years in a row (2016-2019), this is the first time to be in the 2% range since 2015 (Figure 1), back when the U.S. economy was in a slump due to low oil prices. The forecast for the fiscal year 2021 is projected to be 2.2% indicating the recovery would not come immediately.

Figure 1. Changes in the Salary Increase Rate (U.S.)

In the Asia edition, published in December 2020, a decrease was also seen. The salary increase rate for local staff in Asia was 4.2%, down 1.1 points from the previous year. Japanese companies are now facing a difficult time in managing their overseas offices worldwide.

During this COVID-19 pandemic, one of the most common labor management problems was “Lack of sharing information with local staffs”. It increased to 11.3% in 2020 from 8.1% in 2019. Many companies feel the issues over communication caused by the work-from-home environment.
The following comments are excerpted from open-end responses showing the communication issues they face.

• Without a representative regularly based at the local site due to COVID-19, lack of communication and difficulty in reviewing the performance is occurring
• How to communicate over remote work (is difficult)

Although communication seems to be a big issue for many companies, there are some companies that have taken advantage of the current situation to make positive changes. One company had made this the opportunity to deliver the president's video message directly to employees on a global scale and was successful in fostering a sense of unity. Having good communication has never been easy in this era, but by overcoming this hard time, some companies have made progressive changes.

Please contact us if you would like to know more about the salary increase rates, bonus levels of other companies, the management and evaluation policies of other companies, or results in other countries.

2021 Release:Global Salary Report of Local Staffs, Japanese Companies in the Americas

The report includes salary payments, salary increase rates, bonus payment rates, and benefits for local staff at Japanese companies overseas, by country and region. It is essential data for acquiring human resources. The survey has been conducted annually for more than 20 years, and reports are published in a total of 17 countries/regions; 14 in Asia (Cambodia, China, Hong Kong, India, Indonesia, Malaysia, Myanmar, Singapore, South Korea, Taiwan, Thailand, The Philippines, United Arab Emirates, Vietnam) and 3 in the Americas (U.S., Mexico, Brazil). We hope you will find this report useful for your HR strategy, including hiring and contract renewal.