Mercer’s annual Singapore Total Remuneration Survey (TRS) projects 3.7% overall salary increases for Singapore for 2020, a slight increase from the recorded 3.6% in 2019, as measured from data across 1,000 companies and 19 industries.
Faced with the realisation that these pay increases alone may be insufficient to retain and recognise employees, employers may turn to other incentives in addition to salary increments. Kulapalee Tobing, Career Products Leader, Singapore, said: "There needs to be a shift from developing isolated reward initiatives towards more holistic talent strategies that acknowledge pay as only one means of differentiation and motivation."
As such, the report found a continued upward trend of companies in Singapore turning to retention bonuses, with one in three providing retention bonuses in 2019 compared to one in four in 2017.
This trend correlates with external talent becoming increasingly expensive (10.6% premium for executive candidates and 11.6% premium on management candidates if they join at the same level). This premium could go up to 14.4% and 15.3% respectively if the candidate is joining at a higher level.
Industries with the highest and lowest pay increases in SingaporeAs the graph below shows, most sectors don't anticipate vast movements in salaries - in fact, small upward swings in salaries are only expected in consumer goods, lifestyle retail, banking & finance, and life sciences.
Salaries are expected to remain relatively stable across a majority of sectors, including aerospace, chemical, real estate, and high-tech.
Voluntary turnover rates were similarly projected to reduce or remain the same with the chemical and aerospace industries projected to be as low as 8.2%.
Speaking exclusively to Human Resources Online, the Mercer team highlighted key reasons behind some of the sectoral developments in Singapore:
Banking and finance – where we’ve seen a decline from the days of 4% increases to 3.4% this yearThe banking and finance sector has been facing significant transformation and challenges over the last few years. The slowdown and increased volatility across the global economy, together with ongoing trade war, political tension and increased investments into the emerging market economies has resulted in a tightened market in Singapore.
Furthermore, companies in this sector are becoming more budget-conscious and are looking at ways to streamline cost efficiencies through automation and offshoring.
Consumer goods – which has seen the most y-o-y increase from 3% to 4%In the consumer goods sector, fall in exports is reducing and looks set to return to positive growth by Q1 of 2020, especially on exports to China.
This may be the result of US companies’ preference of using Singapore as an alternative supply point for China to avoid tariffs on goods from the US. (Source: IMA Asia)
High tech – where things have been stable at 3.5-3.6% despite it being one of the most in-demand job roles by many estimatesOn the backdrop of economic slowdown in 2019, the hiring activities in high tech companies have remained positive and is expected to continue into the next year.
The most in-demand roles will continue to be analytics and digital-focused, such as data science , application development , cybersecurity , data modelling & forecasting. These roles are not just found in the high tech industry but in other industries as well.
Therefore, this has led to companies considering innovative hiring and retention strategies for these high in-demand employees across the different industries, leading to the consistency in salary increments.
Graph / MercerLead image/ StockUnlimited
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