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The guidelines continue to advocate fair and sustainable wage increases based on a flexible wage system; sustained wage growth for lower-wage workers; and initiatives for upskilling the workforce.
Singapore's National Wages Council (NWC) has released the NWC Guidelines for 2022/2023, which will be applicable from 1 December 2022 to 30 November 2023.
As with the 2021/2022 guidelines, this edition covers three focus areas:
- A flexible wage system
- Sustained wage growth for lower-wage workers
- Transforming jobs and upskilling the workforce
Here are the key recommendations HR teams and employers need to note in these areas:
#1 Wage increases should be fair and sustainable, and based on the flexible wage system (FWS)
In line with economic growth and the improvement in labour productivity, the NWC calls on employers to reward employees with wage increases or variable payments that are fair and sustainable. "Employers should recognise the contributions of employees during the COVID-19 pandemic, where some employees had experienced wage cuts and freezes and supported other cost-cutting measures.
"At the same time, the uncertainties ahead continue to underscore the need for resilience and flexibility in wage structures," it added,
Therefore, the NWC has called on all employers who have not yet done so to implement the FWS.
Employers and HR may refer to the NWC's FWS Guidebook for a better understanding of how the FWS works and how to implement it.
Guidelines
- For employers who have done well and have good business prospects:
- Reward employees with built-in wage increases and variable components commensurate with the employers' performance and employees' contributions.
- For employers who have done well but face uncertain business prospects:
- Exercise moderation in built-in wage increases.
- Still reward employees with variable payments commensurate with the employers' performance and employees' contributions.
- For employers who have not done well:
- Exercise wage restraint, with management leading by example.
- Improve business processes and productivity, especially by upskilling employees.
- Set out future variable payments linked to appropriate business indicators if they face good business prospects.
#2 Press on with sustained wage growth for lower-wage workers
Employers "must press on with the national effort to uplift lower-wage workers* so that our social compact remains strong and no worker is left behind as Singapore progresses."
Guidelines
- For employers who have done well and have good business prospects:
- Provide their lower-wage workers with a built-in wage increase at the upper bound of 5.5 – 7.5% of gross monthly wage, or a wage increase of at least S$80 – S$100, whichever is higher.
- For employers who have done well but face uncertain business prospects:
- Provide their lower-wage workers with a built-in wage increase at the lower to middle bound of 5.5-7.5% of gross monthly wage, or a wage increase of at least S$80 – S$100, whichever is higher.
- For employers who have not done well:
- Provide their lower-wage workers with a built-in wage increase at the lower bound of 5.5-7.5% of gross monthly wage.
- Consider further wage increases if business prospects subsequently improve.
#3 Forge ahead in transforming jobs and upskilling the workforce
Per the NWC, to ensure that wage growth is sustainable and supported by productivity growth, employers and employees should press on with business transformation and training. Thus, the NWC notes that tripartite partners should take decisive steps to transform jobs and invest in upskilling and reskilling the workforce, so as to ensure that wage growth is sustainable and supported by productivity growth.
In line with this, employers should:
- Implement training and productivity initiatives, and tap on the various support measures available.
- Recognise and support the acquisition and demonstration of skills in their decisions on hiring and career advancements.
At the same time, employees should take a proactive approach towards training to ensure the currency of skills, by staying abreast of skills needs in their sector and the broader economy.
Who do these guidelines apply to?
As affirmed by the NWC, these guidelines apply to all employees – professionals, managers, executives, technicians, and rank-and-file, in unionised and non-unionised firms, in both the public and private sectors. The guidelines also apply to re-employed employees.
To facilitate wage negotiation, employers should share relevant information, such as company wage information, business performance, and prospects, with unions.
Additionally, the NWC encourages employers that encounter difficulties in implementing the guidelines to work with the employers’ associations and unions to address the issues. SMEs may also approach the three ethnic chambers – the Singapore Chinese Chamber of Commerce and Industry, Singapore Malay Chamber of Commerce and Industry, and the Singapore Indian Chamber of Commerce and Industry – and other trade associations and chambers for guidance in implementing the guidelines.
Accepting the guidelines on Monday (14 November 2022), the Ministry of Manpower (MOM) said it "stands with tripartite partners to call on employers to reward employees with wage increases or variable payments that are fair and sustainable.
"This will help in addressing workers’ concerns about inflation and rising costs of living. At the same time, we recognise that inflation also affects business costs and prospects. Hence, the Government supports the tripartite agreement to have differentiated wage guidelines for employers, to account for the different performance and outlook of businesses."
Lead image / NWC Guidelines, SNEF's website
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