2021 Salary Projection: 1 in 4 Firms in Singapore Plan to Implement Salary Freezes, Salary Increment Projected to Soften

November 19, 20203:45 pm642 views
2021 Salary Projection: 1 in 4 Firms in Singapore Plan to Implement Salary Freezes, Salary Increment Projected to Soften
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Mercer’s annual Total Remuneration Survey (TRS) for 2020 has revealed that the overall salary increase projected in 2021 for Singapore will soften only slightly to 3.5 percent compared to 3.6 percent in 2020.

Many organizations in Singapore are continuing to take a cautious approach to salary increments as they navigate the impacts of COVID-19. Heading into 2021, the survey showed that a quarter of organizations (25%) will implement or continue salary freezes while 3 percent have indicated they will implement salary reductions. That compares with 30% who implemented salary freezes and 29% who made salary reductions this year. Most however are taking a wait-and-see approach.

Peta Latimer, Mercer’s CEO for Singapore, said, “Businesses continue to remain cautiously optimistic about the future and are considering more holistic talent strategies to energize their employees in the new shape of work, including additional incentives. Leaders are also looking ahead to attract and retain talent required to accelerate business digitalization.”

Mercer’s flagship annual compensation and benefits benchmarking study, the Total Remuneration Survey, identifies key remuneration trends and predictions for hiring and pay for the year ahead. This year, 992 companies across 16 industries participated in Mercer’s Singapore survey.

See also: Singapore to Raise Salary Criteria for Employment Pass (EP) and S Pass Holders

Salary increments to differ across industries, with Lifestyle Retail experiencing the sharpest dip

This year, base salaries moved significantly less compared to previous years especially at the management and executive levels, growing only 2 per cent and 1.2 percent respectively between 2019 to 2020, compared to 6.8 percent and 7.1 percent for the 2018 to 2019 period.

However, looking to the year ahead across the industries surveyed, increments for the Banking & Finance and High-Tech sectors will remain stable while the Logistics and Consumer Goods industries are expecting incremental growth (3.3% and 3.5% respectively compared to 3.1% and 3.4% in 2020). The Life Sciences, Real Estate, Chemicals, and Lifestyle Retail are expecting a dip in increments with Lifestyle Retail expecting the sharpest dip, from 3.3 per cent in 2020 to 2.9 per cent in 2021.

Kulapalee Tobing, Career Products Leader, Singapore, said “The incremental growth in salary increases projected for 2021 in the Logistics and Consumer Goods industries correlates with a shift in consumer purchasing behaviours to online. The steeper decline in the Lifestyle Retail industry is unsurprising given this shift, as well as lower discretionary spending capacities and reduced leisure activities resulting from the pandemic.”

Rewarding digital talent to drive digitalization efforts

The survey found the COVID-19 pandemic has accelerated digitalization across all Singapore businesses. Many organizations are facing increased competition for talent to support digitalized business initiatives.

Mercer’s survey revealed that the most in-demand roles are for Data Scientists, IT solution Architects, Business Intelligence Analysts, and Cyber Security Engineers. Compared to the general market, roles that support digitalization will attract salary premiums especially at senior and specialist levels. For example, specialists with capabilities in cybersecurity incident response analysis and robotic process automation are expected to receive a 33 percent and 30 percent premium respectively on the median annual base salary. 

“Organizations will face increased competition for digital talent as they compete for talent with start-ups and eCommerce businesses, the gig economy, and the government. The good news is that the government remains committed to developing the nation’s tech ecosystem and recently announced plans to launch Tech.Pass, a new employment pass to attract highly skilled technology professionals to Singapore to strengthen its position as a leading tech hub in the region,” said Ms Tobing.

See also: Tech Workers Less Comfortable Negotiating Salary during Covid

Focus on benefits to energize employees and win the talent race

Although affordability is a key criterion for making decisions on salary increases, many organizations are taking a holistic view to redesign the work experience for their employees, including to provide additional incentives and benefits.

Nearly a third of employers in Singapore surveyed (30%) are looking to add or expand telemedicine or digital care to their health programs in 2021 to respond to the acceleration of digital health usage. For example, telemedicine providers such as Doctor Anywhere reported a 156 percent increase in digital active users, and MyDoc recorded a 147 percent increase in the last year.

Additionally, half of employers in Singapore surveyed (50%) will provide for or reimburse their employees for remote working expenses and are considering increased flexibility for onsite and remote working. Coverage for remote working expenses include internet service, laptops, and mobile phones.

Ms Tobing concluded by saying, “Mercer’s TRS Survey is a useful and holistic resource for business leaders to make informed decisions regarding their people strategies, especially in this time of uncertainty. We have partnered with our clients to help them better design agile and employee-centric reward packages so they can stay ahead of the curve.”

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