Mercer’s annual Singapore Total Remuneration Survey (TRS) for 2019 has revealed that the overall salary increase projected for Singapore for 2020 is 3.7 percent compared to 3.6 percent in 2019.
Faced with the possibility that this alone may be insufficient to achieve retention of employees and recognize their contribution, companies are turning to other incentives in addition to salary increments.
“With salary increases and voluntary turnover rates remaining relatively flat, companies should look beyond merit increments to design packages that take the motivational drivers of their multi-generation workforces into consideration,” said Kulapalee Tobing, Career Products Leader, Singapore.
“There needs to be a shift from developing isolated reward initiatives towards more holistic talent strategies that acknowledge pay as only one means of differentiation and motivation,” she said.
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, nearly 1,000 companies participated in Mercer Singapore’s survey, a 10 percent increase on the previous year. Two new industries, hospitality and construction, were also added to the TRS, bringing the number of industries featured to 19.
“The key findings of our survey show that the acceleration of change and disruption across industries and businesses is having a flow on effect on the way companies are approaching their market competitiveness from an employee perspective, particularly as talent pools are shrinking,” Ms Tobing continued.
See also: PM: Salary increment, minimum wage show govt’s concern for the people
Across industries surveyed, Consumer Goods, Lifestyle Retail, and Life Sciences recorded small upward swings in salary increases compared to 2019 (Figure 1). Voluntary turnover rates were similarly projected to reduce or remain the same with the Chemical and Aerospace industries projected to be as low as 8.2 percent.
Mercer’s market pulse survey also revealed a continued upward trend of companies in Singapore turning to retention bonuses with one in three companies providing retention bonuses in 2019 compared to one in four in 2017, demonstrating that companies are looking inwardly to manage talent. This trend correlates with external talent becoming increasingly expensive (10.6 percent premium for executive candidates and 11.6 percent premium on management candidates if they join at the same level). This premium could be up to 14.4 percent and 15.3 percent respectively if the candidate is joining at a higher level.
“The TRS survey and our regular pulse surveys provide business leaders with a holistic view of the market so they can make informed decisions regarding their people strategies that will give them a competitive edge. The demand for this data continues to grow as workplaces evolve and give way to new ways of working,” said Ms Tobing.
“We partner with our clients to help them stay ahead of the curve by using our data and insights to inform the design of agile and employee-centric reward packages. In this way, we help our clients balance their ongoing talent requirements against their business objectives so they can maintain an optimized and engaged workforce.”
Read also: Flexible Wage Increment Proposal to Share ‘Productivity Gains’ with Workers