Salaries to rise by 5% on average: Survey

Salaries to rise by 5% on average: Survey

 

Bullish firms project bigger pay packets this year, but some will cut back on hiring

 

By Zakir Hussain

 

WORKERS’ pay packets will go up by an average of 5 per cent this year, said a survey of local and multinational employers here.

 

This would be an improvement over last year’s 4.5 per cent.

 

At the same time, the bonus payout will average 2.1 to 2.6 months – excluding the 13th month annual wage supplement – similar to last year’s.

 

These findings are from a survey of 193 companies on their pay and hiring plans.

 

The half-yearly poll, compiled this January, is carried out regularly by the Singapore Human Resources Institute (SHRI) and wage consulting firm RDS Remuneration Data Specialists.

 

Their report noted that, despite the unfolding United States credit crunch, many companies continued to be optimistic about business prospects.

 

‘However, some companies are particularly anxious about its spillover effects and have started moderating wage, bonus as well as recruitment expectations,’ it added.

 

Only 73 per cent will be hiring this year, down from 81 per cent last year. They will take on fewer workers than in the past year.

 

But the growing economy will still need workers, noted RDS managing consultant Peter Lee.

 

He said: ‘It is still an employees’ market. If you are good, you can command a healthy pay cheque and you will be courted by headhunters.’

 

Mr Lee believed this was due to the buoyant job market. Singapore saw a record 236,600 new jobs created last year as the economy grew by 7.7 per cent.

 

To keep workers, 95 per cent of the companies surveyed raised wages this year, up from 91 per cent last year.

 

Public-sector workers got the biggest increases of 4.9 to 6.3 per cent this year, while those in electronics manufacturing got the lowest, at 4 to 4.2 per cent.

 

Fewer companies are also freezing wages – 5 per cent against 9 per cent last year. No one is cutting pay.

 

Bonuses will be at their plumpest for finance and insurance workers, who received up to 5.6 months last year .

 

Singapore‘s economic growth is expected to moderate to between 4 and 6 per cent this year.

 

But companies are still hungry for workers. Among them is Maybank, which expects to pay its new hires slightly more.

 

‘We foresee competition for talent to persist. However, rewards will still be performance-based,’ said its head of human resources Wong Keng Fye.

 

But is the average 5 per cent pay rise enough to keep pace with inflation, which hit a 26-year high of 6.6 per cent in January?

 

SHRI executive director David Ang said the annual 13th month wage supplement would help. ‘It’s 8 per cent extra. Wage increases should not outstrip productivity and you can’t just give wages to meet inflation,’ he said.

 

But RDS’ Mr Lee feels that having wages lag behind productivity may not help companies now. ‘In the short term, productivity is not the issue but getting people is,’ he said.

 

‘The line that wages must lag productivity is a good political slogan, but not useful for companies struggling in a tight labour market.’

 

Source: Straits Times

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