Human Resources magazine and the HR Bulletin daily email newsletter:
Asia's only regional HR print and digital media brand.
Register for your FREE subscription now »
As a result of the Singapore economy growing by a healthy 3.1% in 2018, total wages (including employer CPF contributions) in the private sector grew by 4.6% in 2018 (vs 3.8% in 2017). This stemmed from a higher basic wage increase of 4% and an increase in bonus to 2.06 months of basic wage in 2018.
After accounting for inflation, real total wage growth was 4.2% in 2018, higher than the 3.2% in 2017. This brings the median monthly salary for residents to S$4,437, up from S$4,232 in 2017.
This is per the Report on Wage Practices 2018 by the Ministry of Manpower, which took inputs from 5,300 private companies with at least 10 employees each. Together, the respondent companies employ 1,200,000 employees (584,100 local full-time employees and 428,000 foreign employees).
Salary increases by: Sector, type of employees
The highest salary increases were recorded in the financial & insurance services, and professional services sectors; while salaries remain stable in manufacturing, reflecting the uneven output growth within the sector. Food & beverage, and retail trade saw the quantum of wage growth dipping.
Meanwhile, various employees across the hierarchy saw the following rates of total wage growth:
- Senior management: 3.9% in 2018 vs 3.3 in 2017
- Rank-and file (RAF): 4.2% in 2018 vs 3.8 in 2017
- Non-RAF: 4.9% in 2018 vs 3.8 in 2017
- Junior management: 5.4% in 2018 vs 4.1 in 2017
This has been shown in greater detail in the following table:
Overall, 67% of companies confirmed they handed out salary increases in 2018 (vs 65% in 2017), while the proportion of companies that cut total wages in 2018 (9%) fell from 2017 (12%).
For employees who received wage cuts, though the average wage cut was higher in 2018 (-4.3%) compared to 2017 (-3.9%), their proportion among all employees decreased from 10% in 2017 to 8% in 2018.
The biggest considerations in determining wage growth
Profitability, found the research. The performance of the companies, as well as the individuals themselves the main considerations for employers – thus, profitable companies gave higher wage increases and bonuses compared to loss-making ones.
As such, the report also found the a majority of private-sector employees work for companies that have some form of flexible wage system (88%).
For such companies, they have most-commonly adopted the wage recommendation around having a narrow maximum-minimum salary ratio. This was followed by linking variable bonus to key performance indicators (KPIs) and having the monthly variable component (MVC) in the wage structure.
Update on low-wage workers
The proportion of companies who granted wage increases to their low-wage employees held steady between 2018 (61%) and 2017 (62%). Among them, establishments which gave the NWC’s recommended quantum fell slightly from 48% in 2017 to 45% in 2018. Although it declined slightly, it was higher than most years before 2017.
The main reason establishments did not give wage increase was poor business conditions.
A significantly higher proportion of firms with low-wage employees in outsourced work granted wage increases to these workers in 2018 (71%) compared to 2017 (55%).
Among them, 55%-points gave increases which were aligned to NWC’s guidelines, up from 44%-points in 2017. The remaining 29% establishments did not grant wage increments as they were not performing well or felt they were already paying market rates.
The basic wage increase for low-wage employees (7.8%) and outsourced low-wage workers (7%) continued to be higher than all rank-and-file workers (5.5%) in 2018.
For reference, the following are the National Wages Council’s (NWC) quantitative built-in wage recommendations for those earning at or below a basic monthly wage threshold:
All images / Report On Wage Practices 2018