SHRI-RDS Survey on Financial Crisis, Pay and Actions 2009

SHRI in conjunction with RDS surveyed 208 companies in January 2009 to find out about their wage increase, bonus and recruitment plans as well as their cost-management measures in the face of the current global financial crisis.

Summary of Key Findings

  • Practically all companies have been impacted by the current global crisis. However, many are hopeful of being able to weather the financial storm. It is also heartening that companies are cutting costs to save jobs and not cutting jobs to save costs.
  • 66% of companies (compared to 91% six months ago) are still satisfied with current business prospects but only 4% (compared to 22%) are optimistic over the next six months.
  • 38% of companies will freeze wages but only 3% have cut or plan to cut wages. Basic wage increases this year will average 1.5% significantly lower than 2008’s 4.7%.
  • Variable bonuses (excluding AWS) this year will average 1.5 to 1.7 months, lower than last year’s 2.0 to 2.4 months. This will result in a total wage decrease of 2% for 2009 a significant drop from last year’s increase of 6.8%.
  • On recruitment, only 40% of companies will be hiring this year (compared to 63% last year).
  • So far less than 18% of companies experienced staff turnover (compared to 85% last year) and the turnover per company is also lower than last year’s.
  • 7% of companies (compared to 10% last year) retrenched or plan to retrench staff this year.
  • The difficulties being experienced are severe sales drop, cash flow/bad debt, funding and business uncertainties.
  • To cope companies are resorting to measures such as aggressively cutting non-labour costs (54%), staff retraining (27%), cutting benefits (24%) and government assistance (23%).
  • Furthermore, 85% are hoping for cuts in utilities costs, corporate tax (67%), rental (62%), GST (38%) and CPF (11%).