Updated 06:37 PM EDT, Wed, Oct 27, 2021

Why Salaries are Expected to Increase in Latin America & Asia

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Salaries of employees involved in financial services are expected to rise by 4.3 percent this year in Latin America and Asia, a survey of a New York-based investment consultant revealed.

Prensa Latina said the recent survey of Mercer disclosed that the expected increase in the salaries in the two regions are double that of the projected figures in Europe and North America.

It added that the development will happen even as prices of commodities drop, and growth in China continues to slow down.

There are some organizations in North America which are said to be experiencing difficulties in retaining their employees and overseeing the processes, as per FTSE Global Markets.

The same report noted that this was part of the survey's result, despite it revealing that most businesses have earned positive results with such risk management efforts.

According to Insurance Journal, the Global Financial Services Executive Compensation Snapshot Survey of Mercer looked into 71 banks, insurers and financial services companies in various areas in South America, Asia, North America and Europe last year.

Results of the survey showed that 61 percent of the firms have plans to raise the salaries of their employees by as much as 5 percent, an increase which many did not expect with a lot of economies in Latin America affected last year.

Meanwhile, Business Wire noted that the survey also highlighted the focus of financial services firms to set the right tone in their companies with good leadership and risk management.

"Overall, total compensation levels remain broadly the same compared to levels prior to regulated bonus caps. However, banks, particularly in Europe, have significantly increased fixed pay levels, improving the certainty of pay delivered to key risk-takers," said Mercer senior partner Vicki Elliott in the same report.

On the other hand, Mercer Principal and Financial Services Project manager Dirk Vink explained that there is still a concern in relation to the increased focus on fixed guaranteed pay, which reportedly "breaks the link" of pay and performance.

Vink said this could be counterproductive for the company and the employees as well.

"We have concluded that the most positive impact on sound risk-taking behaviors and decision-making has come from significantly improved governance and increased involvement of risk management in the performance management and compensation process," he added.

In addition, Insurance Journal noted that the changes in the financial services sector are part of their effort to maintain strong governance in their companies.

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