Wage increase, Bonus, Recruitment Plans and Staff Engagement Priorities
SHRI in conjunction with RDS surveyed 151 companies in December 2010 to find out about their wage increase, bonus and recruitment plans in the light of the booming economy.
As a follow-up to our previous findings that companies are focusing more on improving staff engagement to drive productivity growth, we wanted to find out what specifically are their priorities in this area. Additionally, on the on-going issue of the minimum wage, we thought it would be interesting to find out what companies thought about its effects on low-wage workers and their employment.
Summary of Key Findings
The booming Singapore economy boosted the fortunes and confidence of most companies in 2010. Practically every company in every sector had a very good year.
For 2011, most companies are equally confident about business prospects although some lingering anxieties about the sustainability of the global economic recovery remain. With cost concerns and rising salaries continuing to worry many companies, restraint on wage increase and bonuses are still evident. This restraint is also reflected in the slight decline in recruitment, staff turnover and training hours.
- Basic wage increases in 2010 year averaged 3.6% significantly higher than the 2.8% projected six months ago. For 2011, the wage increase is projected to increase further to an average of 4.0%.
- Variable bonuses (excluding AWS) averaged 2.3 months in 2010much higher than 2009’s 1.7months. This resulted in a total wage increase of 7.4% a substantial improvement over last year’s 1% decrease. For 2011, the variable bonuses are expected to decline slightly to 2.2 months.
- A total of 77% of the companies hired staff in 2010. For 2011, slightly less companies (68%) plan to hire. The number to be recruited per company in 2011 is also slightly lower than in 2010.
- About 8% of the companies retrenched staff in 2010; in 2011 only 3% expect to retrench.
- 85% of companies experienced staff turnover in 2010 and the annual staff turnover rate averaged 9%. For 2011, less companies, (54%) expect to experience staff turnover.
- Entry salaries for GCE ‘A’ level, Nitec, Higher Nitec, Degree (Others) and MBA holders increased by 1% to over 5% over the last six months of 2010 while those for GCE ‘N’& ‘O’ levels, PSC (Secretary), Diploma (Engineering), Diploma (Others) and Degree (Engineering) remained unchanged.
- To enhance staff engagement, most companies are investing in developing and training their supervisors and managers to handle subordinates more effectively alongside more effective pay incentives and customisation of benefits.
- On the Minimum Wage issue, 41% of companies are not sure of its effects with 34% believing it will benefit low-wage workers. 15% on the other hand, think it will reduce low-wage employment while 8% think it will increase low-wage employment.
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