Singapore - It's more bad news for employees, as salary budget increases have now sunk to a historical low of 2%.

Out of 70 employers surveyed in February earlier this year, Watson Wyatt found that salary increase budgets now stand a 2.0%, a drop from the 4.0% projection in October 2008. This figure is lower than the 3.0% budget increase experienced in 1999 and the 3.2% increase in 2003.

Thirty-one percent of companies will also implement wage freezes, an increase from the "less than 5%" figure seven months ago.Variable bonuses have also taken a hit, as the projection is now down to 1.4 months, compared to 1.8 months in October 2008.

Employee-related cost-cutting measures are also popular among Singapore employers. Some of the oft-cited measures include headcount freeze, hiring freeze, cut in training activities and reduction in salary increase and variable bonuses. Retrenchments were only listed as 12th most popular measure in the survey.

“As challenging as the business outlook may be, Singaporean companies recognise that they need to reward their top performers while practising prudence to contain costs. By implementing sustainable cost-cutting actions, companies are ensuring that their businesses have the necessary resources and skills for the upturn,” says Yvonne Cox, managing director at Watson Wyatt Singapore.