Average starting salaries are up for some chief technology officers (CTOs) in Asia, and it takes more than high demand to push annual pay packages up, says a senior HR (human resource) consultant.
In its latest salary guide of IT and telecommunications professionals, recruitment company Hudson reported an increase in the average starting salaries of CTOs in Japan, compared to its earlier report released eight months ago.
The starting salaries for CTOs in Japan have increased by 33 percent. The October report found that the annual pay packages for CTOs ranged between JPY 20 million (US$167,674) and JPY25 million (US$209,592), compared to the February report which was between JPY15 million (US$125,750) and JPY25 million.
Caleb Baker, regional head of Hudson's IT industry practice, attributed the rise in salaries to two reasons: the rising demand in Japan for senior executives with technology experience and the shortage of local expertise.
"The market for CTOs is very hot now in Japan. That's largely because of the huge increase in investment for the updating of legacy technology systems, and businesses need experienced CTOs to design and implement those upgrades," he told ZDNet Asia.
Compounding the issue, he added, is the limited talent pool. He explained that the usual requirement is for bilingual CTOs in Japan who can speak English and Japanese, and due to the shortage of local talent, businesses have to look at hiring foreign executives instead, which jacks up salaries.
In contrast, CTOs in Singapore see no change in their annual pay packages of S$250,000 while their Hong Kong counterparts can expect a dip. The October report found that the annual pay packages for CTOs in Hong Kong ranged between HK$1 million (US$128,962) and HK$2 million (US$257,924), compared to the higher pay scale of between HK$1.5 million (US$193,443) and HK$2.4 million (US$309,509) reported in February.
The trends are different compared to Japan because supply is less of an issue and "a lot of IT functions are moving out" of Singapore and Hong Kong, Caleb noted.
He emphasized that salaries rise only when demand is high and there is short supply. Citing India as an example, Baker said: "There may be an increase in development work and demand for such skills, but that doesn't mean salaries increase. There has to be a supply issue, too."
According to Baker, although there is a general uptrend for salaries, pay is not the main selling point for most job seekers.
"Some MNCs with strong brands are still keeping salaries [at the same range], so brand is an attractive proposition," he noted. This will keep salaries from fluctuating too much and prevent the job market from overheating, Baker added.