SHRI, in conjunction with RDS, surveyed 218 companies in August 2008 to find out their wage increase, bonus and recruitment plans as well as their employee-relief and cost-management measures in the face of rising inflation and business uncertainties.
Summary of Key Findings
- Many companies have, since late 2007, started to brace themselves for the spill-over effects from the US credit crunch. To date, surprisingly, they do not appear to have felt the full effect of the crisis. Business optimism has dipped somewhat but it is still relatively high as wage increases. Bonuses and recruitment expectations are slightly down from six months ago.
- Slightly less companies (91% of the companies compared to 97% six months ago) are satisfied with current business prospects; 88% (compared to 98%) are optimistic over the next six months.
- Wage increases this year will average around 5.3%, higher than 2007’s 5%. For next year, the wage increase is expected to decline somewhat to 5%, which is still surprisingly high considering the projected business slowdown.
- Variable bonuses (excluding AWS) this year will average 2.1 to 2.5 months, similar to last year’s.
- On recruitment, more companies plan to hire this year (85% compared to 81% last year). Although the number to be hired per company will be lower than last year’s, it is higher than that forecasted six months ago.
- Slightly less companies (84%) experienced staff turnover this year compared to last year (87%). The turnover per company is also slightly lower than last year’s.
- 11% of the companies retrenched or plan to retrench this year. Although this is only slightly higher than the 9% last year, this is significantly higher than the 2% forecasted six months ago.
- Entry-level salaries for some qualifications remained unchanged while others increased by 2% to 5.7% from six months ago.
- 45% of the companies have paid or are planning to pay the once-off ‘Inflation’ Bonus to their employees; one third of whom paid or will pay $100 to $300 and another one third either in higher bonuses or higher wage increases.
- In order to better manage costs in the face of rising inflation, companies are reviewing their ERP and petrol reimbursement rates as well as air travel entitlements.
- 19% of the companies are using outsourcing services, mainly for payroll processing (71%) and benefits administration (21%).