TECH salaries in South-east Asia are expected to grow more slowly or even fall this year, coming off the highs of the past few years. But demand for specialists such as software engineers and product heads is still strong.

These are some of the sentiments among industry players, captured in a report on Tuesday (Apr 4) by recruiter Glints and regional tech investor Monk’s Hill Ventures.

Both companies analysed internal data and interviewed over 40 startup founders and investors, mainly in Singapore, Indonesia and Vietnam.

Tech salaries surged over the past few years with both Big Tech firms and startups fighting for the same talent pool, as The Business Times has previously reported. The tech jobs market in Vietnam was especially heating up due to strong demand for offshore talent.

However, the tide has shifted. While there will still be salary increments to keep pace with inflation, they “will likely be to a smaller extent”, the report said.

“In my opinion, there was a ruthless war on talent with crazy salary inflation as everyone’s fighting for the same small pool of talent in 2021 and early 2022. Hiring, retaining, and having reasonable salary increment conversations will become more manageable,” said angel investor Steve Melhuish, who was cited in the report.

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He added: “At the same time, inflation is growing, so there will still be expectations on salary increase – but not 30 per cent per annum, closer to 5 per cent to 7 per cent per annum.”

Wilson Yanaprasetya, co-founder and chief technology officer of commerce platform Dagangan, echoed this sentiment for the Indonesian market.

“We expect salary growth for entry-level talent in Indonesia to increase a lot less. In the past two years, they’re used to a 20 per cent to 50 per cent increase with every job hop, but with supply exceeding demand, this will change,” he said.

Hung Phan, co-founder and chief executive officer of startup Papaya Insurtech, believes that salaries in the tech hub of Vietnam may even fall.

“We see quite a few tech companies in Vietnam having layoffs, particularly the big ones. So there will be abundant availability of tech talent going into the first half of 2023. That’s when we may see a salary decrease,” said Phan in the report.

This will be a “strange year” for attracting, hiring and retaining talent, given recession fears and rising interest rates, among other headwinds. The report noted: “Tech companies that have been rampant with layoffs in 2022 will be more strategic and cautious with whom they hire going forward.”

Specialists wanted

That said, startups are still looking to invest more in “revenue-generating roles” this year as they target profitability. The top three functions being prioritised are engineering, business development and sales, and marketing and public relations.

“Engineering remains the most sought-after tech function, with the vice-president of engineering making upwards of US$235,200 annually,” the report said, adding that after engineering, talent in product and data are the highest paid.

Product managers received the highest salary increment from 2021 to 2022 among all tech roles, with a 27 per cent median base salary increase, the report said. On average, product managers in Singapore are paid more than three times their counterparts in Indonesia and Vietnam. A vice-president of product or head of product in Singapore can make over US$193,200 annually.

“Product roles are still relatively nascent in South-east Asia, with very few talent fulfilling the full scope of a product manager and often seen more like project managers. Despite their increasing importance, there is still more demand than supply,” the report said.

Attracting high-performing talent will be key for founders in this climate where they have “to do more with less while achieving positive unit economics”, said Oswald Yeo, co-founder, and CEO of Glints.