Singapore's biggest employer cuts mid-year bonuses

The various civil servant unions agreed with the decision considering the COVID-19 recession

Singapore's biggest employer cuts mid-year bonuses

Singapore’s civil servants won’t be getting their annual mid-year bonus, considering the ongoing economic crisis.

Officers in senior roles will also be taking a one-time salary cut of between half to a full month’s pay.

Those in the top rank will face a bigger cut, according to the Public Service Division (PSD). This comes on top of the earlier half month pay cut taken by senior officers in key leadership positions announced in February 2020.

“The COVID-19 pandemic has taken an unprecedented toll on the economic situation both externally and domestically,” PSD said in a statement. “The public service stands in solidarity with the rest of the nation during this difficult period.”

READ MORE: COVID-19: How to implement a 'fair' employee pay cut

These measures take into consideration recommendations by the National Wages Council (NWC) in March for management to take the lead in any cost-cutting measures, with the aim of saving jobs.

The government will continue to monitor the economic situation closely before deciding on the status of year-end bonuses. Special consideration will be given to lower-wage workers when making such decisions.

The cuts are reflective of the “deep global recession” caused by COVID-19, which the Monetary Authority of Singapore predicts will have a drastic impact on wages.

Despite this, the public sector has the most promise in helping to stabilise the hard-hit labour market due to “accelerated hiring plans for permanent roles” in several areas. The PSD currently has a workforce of over 85,000 employees in Singapore.

READ MORE: This is how COVID-19 will most affect employees

“The government appreciates the hard work and sacrifices of public officers in the fight against COVID-19, including those working on the frontline and behind the scenes,” PSD wrote.

“Many have gone beyond their call of duty to take on additional or expanded roles to support our workers, businesses, and fellow Singaporeans in weathering the economic uncertainties and adjusting to the new normal.

“Government agencies will make different efforts to appreciate and recognise the good work of officers.”

This aligns with insights shared by Godelieve van Dooren, partner at Mercer. While van Dooren noticed that many companies have focused on cost-containment efforts to cope with the crisis in the short-term, leaders should work on longer-term strategies to ensure engagement as well as retention.

“The unprecedented situation presented by the COVID-19 pandemic has seen organisations focusing on the well-being of their employees and sustaining operations,” she said. “The majority of employers in Asia Pacific have sought to protect the incomes of most of their salaried and hourly paid employees.”

READ MORE: Singaporeans have 'higher expectations' of employers in 2020

Moving forward, employers must showcase their commitment to providing stability and job opportunities to workers.

“One thing is certain, compensation and benefits practices need to be re-visited to align with the new workforce composition,” she said.

“Pay and rewards should not be viewed in a silo but as part of the overall employee experience. It should also give consideration to responsible rewards, protecting employees’ well-being, and having a sense of purpose.”

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