Seven in 10 employees enjoyed a pay bump
More Singapore-based employers were able to raise wages in 2021, according to a report from the Ministry of Manpower (MOM), but data shows they were more cautious in increasing salaries this time around.
MOM said that in 2021, the proportion of profitable employers increased to 75% in 2021 from the 63% the year before, allowing some of them to "restore wage cuts made in 2020."
According to MOM, this led to 70% of employees receiving wage increases in 2021, compared to the lower 59% in 2020.
"The extent of their wage increases was also higher in 2021 (6.3%) than 2020 (4.5%)," MOM pointed out.
"Correspondingly, the proportion of employees that saw wage cuts in 2021 (10%) was about half of 2020 (23%). Among employees who saw wage cuts in 2021, the wage cuts (-5.2%) were less steep than 2020 (-6.9%)."
All sectors were also able to experience higher total wage growth in 2021, with the sectors of Information and Communications, Financial and Insurance Services, and Manufacturing reporting the "healthy expansion" despite the pandemic.
Employers cautious
The total wage growth for resident employees under the same employer for at least a year was 3.9% - the same level of the wage growth back in 2019. This is higher than the previous 1.2% growth in 2020, which MOM described as a "period of moderation."
According to the ministry, the rebound in wage growth reflects the "broad-based economic recovery across industries," as well as the tight labour market due to border restrictions that hampered the entry of non-resident talent.
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However, MOM also pointed out that the 2021 rebound seemed lower than the rebound reported in 2010 after the Global Financial Crisis (GFC).
This suggests that "employers may have been more cautious in raising wages given the longer tail of the COVID-19 pandemic."
"As COVID-19 had a less severe impact on wages compared to the GFC3, wage growth also had less ground to recover in 2021 compared to 2010," said MOM.
2022 expectations
The ministry said the tight labour market this year is expected to support nominal wage growth - but relaxation of border restrictions and the entry of non-resident workforce may start easing the tightness.
The risks of the global economy also remain, according to MOM, such as the ongoing Russia-Ukraine conflict, which would affect demand and nominal wage growth.
"With recent shocks to the global supply chains, inflation is projected to stay elevated and dampen real wage growth," it said.
