Hiring and wage outlook improves after pandemic-hit year
As vaccines are rolled out and economies open up, can employees in Singapore and the region look forward to higher salaries? Money Mind takes a closer look.
SINGAPORE: Companies across the world have had a tough time over the past year adjusting to the impact of COVID-19.
Within a short time span, companies have had to switch to flexible work arrangements and speed up digital transformations to keep their business afloat.
Many firms also had to downsize staff and cut or freeze pay along the way.
As economies gradually open up and nations roll out their vaccination programmes, the tide seems to be turning and experts are expecting better hiring and wage prospects for Singapore and the region - particularly for some industries such as technology.
According to consultancy firm Willis Towers Watson, about 30 per cent of private firms in the region froze pay last year to cut costs amid lockdowns and falling revenues. In 2021, only about 13 per cent expect to free pay.
In a sign of optimism, 85 per cent of global companies surveyed by the company said they intend to increase salaries this year.
For developing countries, the salary rise could average 6.2 per cent, while in advanced economies, workers could see their pay increase by about 2.5 per cent.
In the Asia Pacific region, the average pay rise forecast is 5.3 per cent – just slightly below the revised 5.4 per cent increase in 2020 and the 5.6 per cent rise in 2019.
Ms Vidisha Mehta of Willis Towers Watson said the overall atmosphere is one of cautious optimism, and that many organisations are taking a wait-and-see approach.
For Singapore, an average increment of 3.5 per cent is expected in 2021, lower than the previous two years.
Ms Mehta, who is the head of talent and rewards at Willis Towers Watson, said the average reflects the differences between sectors and how they were impacted by the pandemic.
“High tech as an industry is continuing to do well. We're also seeing pharma and healthcare do well and project higher increases relatively. There are, of course, industries that have been affected by the pandemic in an adverse manner. And a large part of those have been around the travel industry or physical retail. And so there might be a little bit of conservatism in those industries,” she said.
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According to a survey by hiring firm Michael Page Singapore, annual salary may increase by 3.5 per cent in the tech sector, and 2.8 per cent in health care and life sciences.
Pay rises in the retail, property and construction sectors are expected to be just above zero.
“The mindset is really to save jobs, as many jobs as you can," said Mr Nilay Khandelwal, managing director of Michael Page Singapore.
If your industry or your area of expertise does not allow you to, then you've got to be very honest and you can't increase the pay. The idea is to make sure that you reward people based on the performance at this point of time,” he added.
Consultancy firm Mercer said economic uncertainties are pushing employers in the region to be more prudent. However, there is also the risk that when the economy starts to pick up, business that freeze pay could potentially lose good talent, it warned.
In a reward trends study, Mercer found that employers’ top priorities for 2021 involve managing costs while delivering competitive pay and benefits at the same time.
Employers are also looking to align incentives with business objectives as they try to improve the digital workplace, and provide targeted value and pay to employees.
Mercer’s Asia career business leader Godelieve van Dooren said: “We have talent transformers that are coming up. It’s about reskilling people. How can we reinvent the way we work? What about hybrid working, and how do we collaborate? We can really give a positive experience to employers and managers, and pay should be incentivising that."
As workplaces evolve, experts said certain jobs will demand premium salaries due to supply and demand.
Mr Khandelwal of Michael Page Singapore said technology professionals can expect to receive the largest salary increments.
“Just in Singapore alone, the average increment is in the range of 15 per cent to 20 per cent. In normal market conditions, it was probably 10 per cent or 15 per cent. So, it has picked up. And I think the demand is definitely higher than supply.”
More firms in Singapore now plan to add headcount after hiring activities dipped by 35 per cent last year, said Michael Page.
Apart from technology, jobs in high demand also include sales and marketing, finance and accounting, logistics and supply chain and human resources.
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While compensation remains key in attracting talent, some experts also there has been a shift in how workers view pay.
This includes the financial stability of the organisation, the ease of career progression, as well as mental health support for employees.
HR expects said that given the growing consciousness over such issues, the companies that are able to articulate such qualities in their employee value proposition will be in a better position to attract and retain talent.