Salary increments here to recover in 2021, 2022: recruitment firms

Singapore

AFTER a lean 2020, employees in Singapore may expect salary increments to start approaching pre-Covid rates this year and next - while those in high demand could net raises of 20 per cent or more when switching employers, said recruitment firms.

Hiring demand is particularly strong in growth industries such as technology, financial services, and life sciences, they added.

For those staying put, pay rises are not expected to match Singapore's official growth forecast of 6 to 7 per cent, which was upgraded on Aug 11.

But they will still be a step up from 2020, when private-sector wages rose just 1.2 per cent, compared to 3.9 per cent in pre-pandemic 2019, according to Ministry of Manpower data. The lowest figure in the previous decade was 3.1 per cent, in 2016.

Mercer's latest quarterly Salary Movement Survey suggests that increments in 2021 averaged 3.2 per cent, excluding firms with pay freezes, or 2.8 per cent including them.

For 2022, the average increment forecast by companies is 3.4 per cent or 3.2 per cent, excluding and including salary freezes respectively.

"That said, about 70 per cent of the companies we polled are still planning their budgets for 2022 and will continue to monitor the situation closely," said Mercer Singapore rewards product leader Mansi Shetty.

"Broadly speaking, companies are facing pressure to raise wages due to a surge in attrition across jobs and industries," she added.

Mercer also sees an increase in hiring across all levels as a result of migrant labour shortages, reopening of positions that were frozen in 2020, and further tightening of immigration and entry rules, among other reasons.

Willis Towers Watson's 2021 salary budget increase survey shows that Singapore firms will offer an average 3.2 per cent pay rise this year, and 3.7 per cent in 2022, due to the improved business outlook.

This is driven by high attrition rates too, at 13.1 per cent this year and an estimated 15.9 per cent next year, said Willis Towers Watson head of talent and rewards Vidisha Mehta.

Randstad Singapore managing director for Malaysia and Singapore Jaya Dass sees brighter prospects: "Employees who choose to stay with their current employer may enjoy a wage increase of about 5 per cent to 8 per cent, if the company takes into account market adjustments."

But such an increment "is not expected to be evenly distributed across all industries", she added.

Willis Towers Watson found that the fintech, high-tech, media, and pharmaceutical and health sciences sectors report the highest salary budget increases for 2022, of more than 4 per cent. At the other end are industries such as energy and natural resources, with an expected 3.1 per cent increase.

For Mercer, industries at the top end included life sciences, consumer goods, technology, and insurance, with raises of 3.4 to 3.6 per cent in 2021, and similar forecasts for 2022.

Those who switch firms can expect more. "We are seeing around 15 per cent to 20 per cent salary increment on average for professionals in Singapore who successfully move jobs," said Michael Page Singapore regional director Jeffrey Ng.

Naming sectors such as technology, digital, financial services, and healthcare and life sciences, he added: "This increase is seen across most job functions, more acutely felt in the technology domain, sales, business development, commercial roles, front office banking, legal as well as risk and compliance."

Professionals switching employers might get up to 15 per cent more in banking and financial services, manufacturing, and accounting; and up to 20 per cent more in life sciences and technology, said Ms Dass.

As for specific roles, tax specialists in financial institutions, legal professionals and digital marketing experts may get a 20 per cent boost, while tech professionals in cybersecurity and data, as well as heads of engineering, may get a 30 to 35 per cent raise.

Some specialist or niche skill sets or business critical roles can command more regardless of industry, according to RGF Singapore managing director Mike Wilkshire.

Senior professionals in artificial intelligence or Big Data may get up to 20 per cent more when switching jobs, while cybersecurity roles may offer pay hikes of 18 to 25 per cent.

Even firms in less-flourishing sectors may feel pressed to pay more, said Ms Mehta, noting: "On the one hand, employers need to continue to effectively manage fixed costs as businesses rebound from the pandemic. On the other hand, companies recognise the need to boost compensation especially in sectors where there may be a manpower crunch."

This has driven some to explore alternatives to fixed pay rises, such as sign-on, referral and retention bonuses, functional and skills premiums, and mid-year adjustments.

READ MORE:

• Singtel, SATS, SingPost, ST Engineering lift salary freezes, restore pay as economy recovers
• Economists' forecasts for Singapore's 2021 growth fall within upgraded official range