Who received wage increases last year?

Wage increases remain “closely tied” to firms’ profitability, says MOM

Who received wage increases last year?

Fewer employees received wage increases in 2016 and wage growth also slowed down from a year before, according to recent figures from the Ministry of Manpower (MOM).

The ministry’s “Report on Wage Practices 2016” released yesterday revealed that 75% of employees received wage increases, compared to 77% in 2015. Wage growth also “moderated” 3.1% from 4.9% over the same period.

MOM attributed the lower rates to a drop in the number of profitable firms – there were fewer of them in 2016 (76%) compared to 2015 (79%).

About 9 in 10 establishments have put in place a wage system that gives flexibility to adjust wages and bonuses according to business conditions and employee performance. Similarly, 90% of private sector employees work in establishments that have some form of flexible wage system – the highest since 2004.

“Having a narrow maximum-minimum salary ratio remained the most common wage recommendation adopted by establishments, followed by linking variable bonus to Key Performance Indicators (e.g. firm profitability and productivity) and including a Monthly Variable Component in the wage structure,” said the ministry.

More profitable firms continued to give higher total and basic wage increases than less profitable ones. “Profitable firms also gave larger bonuses (of at least 2 months in quantum on average) compared with loss-making firms (1.31 months).”


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