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Smaller pay hikes likely in Singapore next year
PAY increases next year in Singapore are likely to be a tad smaller than in 2015, even though increases around the world are tipped to be the biggest in three years.
Pay in Singapore is expected to rise 4 per cent in 2016, against a projected hike of 4.4 per cent this year, according to global human resources consultancy Korn Ferry Hay Group.
"The low increment projection for Singapore is in line with muted business sentiment amid a global slowdown and businesses adopting a still-cautious outlook," said Korn Ferry Hay Group in a study based on data drawn from more than 20 million job holders in 24,000 organisations in over 110 countries.
After adjusting for inflation, likely to be 0.3 per cent, the real pay increase in Singapore will probably be around 3.7 per cent, the study said.
It made no mention of the projected real increase for this year, but the Singapore Workforce 2015 report which the Ministry of Manpower (MOM) released last week indicated that the tight labour market and negative inflation would raise the real median income 5.4 per cent this year.
So it looks like the real wage increase in 2016, which the study projected to be 3.7 per cent, is going to be smaller than in 2015.
Yet workers here will be better off than others in many parts of the world. Global real pay increases for 2016 are forecast to be 2.5 per cent. This may be a three-year-high, but it's still smaller than the increase in Singapore.
But Korn Ferry Hay Group's projected pay hikes for Asia as a whole are bigger than its projections for Singapore alone.
While salaries are likely to grow 6.4 per cent in 2016 in the region, down 0.4 percentage point from 2015, real wage is tipped to rise 4.2 per cent - the highest worldwide.
"Asia continues to drive growth in wages globally as companies look set to increase wages," said Philip Spriet, global managing director for productised services at Korn Ferry Hay Group.
Vietnam (7.3 per cent), China (6.3 per cent) and Thailand (6.1 per cent) are expected to see the largest real increases in pay.
Despite China's economic slowdown, coupled with plummeting stock markets and reduced exports, Korn Ferry Hay Group's study said the country's employment rates continue to rise - thanks to increasing demand for skilled workers and the rise of the middle class.
Mana Lohatepanont, Korn Ferry Hay Group's managing director for Southeast Asia, said Vietnam topped the region's real wage increase because of "a very competitive talent market".
The projected high real wage increases for Thailand reflect a slow- growing economy - the slowest in Asean - and lower global oil prices, which translate to low inflation that's tipped be just 0.1 per cent.
In nominal terms, India is expected to see the biggest jump in pay next year - up 10.3 per cent. But much of this is likely to be negated by high inflation, projected to be 5.6 per cent. Thus real wages there will go up just 4.7 per cent in 2016.
Along with the increase in Singapore, 2016 pay hikes in other Southeast Asian nations including Vietnam are expected to be slightly lower than in 2015.