SINGAPORE: Salaries in Singapore are set to rise 4 per cent next year, compared to an average of 5.9 per cent across the Asia-Pacific region, according to a survey released on Tuesday (Oct 4).
After taking into account Singapore’s inflation forecast of 0.8 per cent, salaries in the city-state are expected to rise 3.2 per cent, the survey by professional services company Willis Towers Watson found.
Among Asia-Pacific countries, wages in Pakistan are expected to rise the most at 10.2 per cent, followed by Bangladesh and India with a 10 per cent increase. Vietnam is expected to see an increase in salaries of 9.6 per cent, Indonesia 9 per cent and China 7 per cent.
Hong Kong is expected to see a 4 per cent growth in wages – similar to Singapore – but because its inflation forecast is 2.3 per cent, the salary increase in real terms is likely to be 1.7 per cent.
Japan is expected to see the smallest increase in salaries at 2.3 per cent, according to the survey.
Salaries in Asia Pacific were projected to rise 6.4 per cent this year, but in reality rose just 5.8 per cent – the first time since 2012 it fell below the 6 per cent mark.
“We are seeing lower salary increase budgets across much of the region,” said Mr Sambhav Rakyan, Data Services practice leader, Asia Pacific at Willis Towers Watson. “Back around 2012 and 2013, companies in Asia pumped a lot of money into their salary budgets and drove salaries up, but they didn’t see the revenues rise in tandem, so it made such increases unsustainable. Now these companies are being much more prudent.”
He added that as the available budget shrinks, companies need to be smarter about how they use them to retain talent. “It’s important to prioritise the best performers and also to review how employees are rewarded with other incentives, such as more attractive benefits,” he said.
Ms Maggy Fang, Head of Talent and Rewards, Asia Pacific at Willis Towers Watson suggested that companies should rethink whether annual base salary increases are the best way to reward employees.
“Nowadays people are looking for other options besides a standard annual pay rise. Employees are looking at how and when their performance is rated, and also for more flexibility in their benefits packages.
“Therefore companies need to adopt a more holistic approach and consider total rewards factors such as career development opportunities, recognitions, ongoing communications and flexible working arrangements,” she said.
The survey collected about 4,000 responses from companies across 22 markets in the region, covering industries such as technology, financial services, pharmaceutical and health sciences, chemical, energy and natural resources, media, retail, construction and engineering, transportation and consumer goods.