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Singapore wage trends 2022: Highest nominal wage growth observed in a decade

Singapore wage trends 2022: Highest nominal wage growth observed in a decade

Additionally, while prices have risen, nominal wage growth kept pace with inflation, allowing real wages to grow marginally in 2022 (0.4%).

According to the Report on Wage Practices 2022, the proportion of profitable establishments in Singapore rose to 83.9% in 2022. In tandem, nominal wages of full-time employees who had been with the same employer for at least one year rose by 6.5% in 2022 — a significant growth from 3.9% in 2021, and the highest in a decade.

This growth reflected the efforts by firms to restore wages of employees who experienced wage cuts during the pandemic years, as well as give higher increases to retain staff amidst competition for workers, the Manpower Research and Statistics Department noted. While prices have risen, nominal wage growth kept pace with inflation, allowing real wages to grow marginally in 2022 (0.4%). The real wage growth in 2022, as shared, was lower than in 2021 (1.6%).

Particularly, the proportion of establishments that gave wage increases rose from 60% in 2021 to 72.2% in 2022, along with the increase in the proportion of profitable firms. The proportion of establishments that provided wage increases was also slightly higher than the pre-pandemic level in 2019 (69.2%).

On the other hand, establishments that cut the wages of their employees remained in the minority, at 5.2%. The remainder (22.6%) left the wages of their employees unchanged.

Among the establishments that gave wage increases, the extent of increase was noted to be larger in 2022 (7.9%), compared to 2021 (6.3%). In parallel, the magnitude of wage cuts among establishments that gave wage cuts was also less steep than the previous year (from -5.2% to -4.5%).

Breaking down the data by employee type, the report found that rank-and-file (RAF), junior management, and senior management employees all experienced higher wage growth in 2022 compared to 2021, with the increases in 2022 higher than in 2019 (i.e, pre-pandemic) (RAF: 3.8%, junior management: 4.1%, senior management: 3.9%).

Industry wage trends

Apart from the above, the report also looked at the wage trend by industry. 

Overall, all industries saw higher wage growth in 2022 compared to 2021. That being said, the extent of increase varied across industries:

  • Accommodation and retail trade registered above-average wage increases, at 9.7% and 6.7% respectively. As the study elaborated, companies in these industries offered higher wages to keep their workers amidst the strong recovery in Singapore’s tourism and a tight labour market.
  • Meanwhile, outward-oriented sectors of financial services (9.0%), information & communications (7.7%), and professional services (7.6%) continued to register robust wage increases in 2022, alongside sustained manpower demand in these industries.
  • On the other end, lower wage increases were observed in manufacturing (5.7%) and wholesale trade (5.8%), which were affected by global supply chain disruptions and weakness in trade-related activities.

2022 mrsd wage industry

 

Finally, the report also looked at the adoption of a flexible wage system (FWS), in line with recommendations in National Wages Council (NWC) 2021/22 guidelines. Overall, the proportion of firms that implemented some form of FWS in 2022 grew from 75.4% in 2021 to 80.6% in 2022 — the first increase after a downward trend in the past five years. This increase was broad-based across industries.

Looking ahead, more firms expressed intentions to raise the wages of their employees in March 2023 compared to December 2022, amidst stiff competition among firms to attract and retain talent, the report highlighted.

That said, against the backdrop of the global economic slowdown and a more uncertain business environment, firms are still likely to take a more cautious approach regarding salary increments. Hence, the report expects wage growth to moderate in 2023.

Commenting on the report findings, Patrick Tay, Assistant Secretary-General, NTUC, shared: "The key highlight is that more businesses are doing better and more are enjoying higher wage increases than past years. Although positive, we are faced with the twin challenges of an uneven and uncertain outlook as well as high inflation."

Therefore, he added, "[We] not relent in our efforts to push to better uplift the lower wage workers and also support the broad middle (oftentimes referred to as the sandwiched class), especially with the rising cost of living so that they do not just enjoy gross but real wage increases."


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Lead image / Report on Wage Practices 2022

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