What is the average expected salary increase for next 12 months?
Despite a lack of optimism about economic prospects, a recent business survey reveals that a significant majority of employers in Singapore are gearing up to offer their employees pay raises in the upcoming year.
The survey, conducted by the Singapore Business Federation (SBF) found that 67 percent of the respondents polled in July expressed their intention to increase employee wages over the next 12 months. This announcement comes with an average expected raise of 6 percent, demonstrating a strong commitment to improving employee compensation.
However, the results also indicate a shift in employer sentiment compared to the previous year. In the survey conducted, 76 percent of respondents reported that they had already raised wages in the past 12 months. This suggests that while companies remain committed to salary growth, the pace of increases may be moderating.
The survey breaks down salary changes by company size, revealing that larger corporations are more likely to increase salaries. 88 percent of large companies stated that they had already increased wages in the past year, and 86 percent of them expect to continue this trend in the upcoming year.
But among small and medium enterprises (SMEs) surveyed, 73 percent raised wages in the last 12 months, and 62 percent plan to do the same in the next 12 months.
Surprisingly, 61 percent of respondents had both increased salaries in the last 12 months and expressed intentions to continue raising salaries in the next 12 months.
Associate Professor Walter Theseira, an economist at the Singapore University of Social Sciences, offered insights into the wage changes to The Straits Times. He noted that while recent wage increases have been high in nominal terms, they have barely outpaced inflation.
“For example, although last year’s wage increase was 6.5 per cent as measured by the Ministry of Manpower, which is close to what was reported by firms in the (SBF) survey, real wages increased by only 0.4 per cent due to high inflation,” he said.
“So, the projected wage growth does seem to be ahead of inflation – which is moderating – but it may in a sense just be catching up, given that real wages hardly increased last year,” Theseira continued.
The survey results also reflect a positive employment outlook in Singapore. A striking 89 percent of employers expect either no change or an increase in their number of full-time employees in the next 12 months. This is a significant increase from the 80 percent who either maintained or hired more full-time employees in the previous 12 months.
These anticipated salary increases and hiring intentions come at a time when companies are preparing themselves for weaker economic conditions, higher costs, lower revenue, and other challenges in the coming year.