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Singapore salary increases consistent in 2017 amidst challenging market

Mercer's Ivan Tan, senior total rewards consultant; and Kulapalee Tobing, Singapore career products business leader take stock of the key labour market trends in Singapore.

The global economy in 2017 has been rejuvenated after a lacklustre 2016, particularly due to Asia Pacific’s continued upward trajectory. Although Singapore’s GDP growth was initially disappointing, with year-on-year growth for the first quarter decreasing from 2.7% to 2.5%, stronger growth of 2.9% in the second quarter puts Singapore on stronger footing to achieve total GDP growth of 2%–3% this year.

The fragility of Singapore’s economy has created challenges in the labour market. At a time when businesses need to stay competitive, leaders are strongly compelled to be more prudent in their spending. Average 2017 base salary increases (actual/budgeted) excluding salary freezes, remain consistent with previous years at 3.7%, according to Mercer’s 2017 Asia Market Pulse Survey results. However, projected rising inflation could depress wage increases, and most employers are not planning to increase HR budgets for 2018.

Figure3

Winning tactics for HR

Businesses looking to grow need to tap into their employees’ potential by allowing them to thrive, redesigning structures to enable employees to do more of what they do best. A great way to gain new solutions to pressing challenges is to form teams that represent multiple generations and cultures, so organisations can learn from various perspectives. Encouraging collaboration rather than competition within the workforce can enhance productivity.

HR professionals also require sound analytic tools, instead of simply relying on instincts honed from past experiences. Unfortunately, many companies have made slow progress — 67% of companies have plans to start tracking metrics in the future, but 65% expressed challenges related to inaccurate and inconsistent data coming from different sources.

Workforce analytics can provide greater insights into how reward policies can be better positioned to match employees’ demands. Combining the power of thriving employees with industry-leading data will allow organisations to stay abreast of trends and create a healthy environment in which employees willingly strive to achieve outstanding results.

All graphs / Mercer

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