Bonuses are set to increase slightly while pay hikes are predicted to remain the same next year.
This is according to a poll HR Business Solutions (HRBS) conducted on a pool of 1,700 employers in 19 Asia Pacific markets, including 142 from Singapore.
The study predicted the average bonus will rise to 16% of total pay in 2014, up from 15% this year due to the tight labour market and higher inflation.
Singapore had the second biggest bonus payouts among the 19 markets covered in the survey, with Bangladesh and Pakistan expecting the most with 17% increments in bonuses.
“Singapore’s labour market is very tight and inflation is set to rise… however, due to economic slowdown and uncertain business outlook, companies are generally adopting a cautious approach to managing their costs to safeguarding their bottom line,” HRBS’ managing partner Elaine Ng told Human Resources.
The study also revealed pay in Singapore is expected to increase 5% in 2014, similar to what it was this year, and slightly higher than it was in 2012 (4.5%). Ng also predicts the highest pay rise of 6% to come from the financial sector, due to its shortage in talent.
“Labour costs have been rising rapidly in recent years and far surpassing productivity. For Singapore, the appreciation of the Singapore dollar has made Singapore labour costs higher in US dollar terms in comparison to surrounding countries,” she said.
Meanwhile, salary increments remained static in other markets such as China, Hong Kong, Malaysia, South Korea and Vietnam.
Only three other markets saw slightly higher salary increases – Indonesia (0.2%), New Zealand (0.1%) and Taiwan (0.1%).
The biggest pay hikes came from low-income markets such as Bangladesh, India, Indonesia, Pakistan and Vietnam, ranging from 10% to 13.3%.
In order to prepare for next year’s budget increase, Ng advised companies to be well informed on how the labour crunch will affect their industry and market, and focus on attracting and retaining employees of different levels and functions.
“Balancing the rising costs of labour against return from labour is key to the survival of organisations, and HR has to adopt appropriate strategy and systems to track ROI of human capital,” she said.