Why middle managers Will have to make do With less
Singapore is projected to have one of the lowest increases in Asia Pacific, with only 22% of employees expected to get a pay hike this year.
Heftier paychecks are on hold for most of Singapore’s hopefuls as employers brave a lacklustre economic outlook this year. With a dearth in highly-skilled talent amidst a candidate-saturated market, firms are taking a more conservative approach in increasing salaries, offering bonuses, and taking in fresh blood. Only 22% of employees will experience a pay hike this year, but it will be so small it’s almost negligible.
This year, a staggering 68% of Singapore’s workforce expects salary hikes compared to an average of
49% of candidates and employees around the world, says Michael Smith, managing director, Randstad Singapore. Executives, who are now more concerned with containing costs than showering employees with bucks and benefits, are challenged to temper soaring expectations while making sure that their best talents are not snagged by other companies.
Across Singapore’s industries, increases will be experienced by only 15% of those who expect it. Michael Page’s Salary and Employment Outlook 2017 forecasts a 1-5% salary increase for this small part of the workforce, except for employees in senior-level and management who will possibly receive increases of a minimum of 5%. However,
Willis Towers Watson’s Asia Pacific Salary Budget Planning Report shows that Singapore is not one of the few countries that are actually expecting base salary hikes in real terms. Analysts at Willis Towers Watson forecast that only Sri Lanka, Indonesia, China, Cambodia, Hong Kong and Taiwan will experience higher base salaries in real terms in the coming year compared to 2016 numbers.
Pay hikes in recent years may be less than impressive, but 2017 seems to be the most dismal of all with China’s economic slowdown being felt in the rest of the Asia Pacific region, primarily in financial hubs such as Hong Kong and Singapore. Employers in these two cities are thus faced with a huge task of strategising their remuneration schemes in order to squeeze out the most efficient system possible.
“Offering a competitive salary is an important strategy to win the war on talent, as well as retain top staff. Critical to achieving this strategy is being aware of the most up-to-date market salary rates and remuneration trends,” says David Jones, senior managing director, Robert Half Asia Pacific. Jones adds that it employees who are well-informed on remuneration trends can command reasonable salaries, facilitate good salary negotiations, and identify which skills are in demand in the market and which ones they should develop.
Pay or nay?
In terms of salary increases, candidates in Singapore continue to demand and expect high raises and offers of up to 40% across all sectors. Christine Wright, managing director, Hays Asia, says that increases are on the cards due to candidate shortages, however, employers are not keen on delivering high rates compared to a few years ago when the economy was growing faster than it is now. It is a tough balancing act, as salary remains to be the key motivator amongst other elements in the remuneration package such as annual leave, medical and insurance cover, and flexible work arrangements.
Michael Page’s Salary and Employment Outlook 2017 reveals that employees in the legal sector can expect pay hikes of a minimum of 10% and a maximum of 20%, the highest in the coming year amongst all the sectors. Those who provide financial services in the legal sector with 10-15 years post-qualified experience (PQE) can command as much as $350,000.00 with a minimum rate of $200,000.00, while those with 15 years and above PQE can command a minimum of $280,000.00. International private practice leads local private practice by almost double--lawyers in local firms with 3-5 years PQE can receive as much as $150,000.00, but lawyers in international firms with the same experience can take home a maximum of $250,000.00.
According to Robert Half ’s 2017 Singapore Salary Guide, demand is strong for junior and mid-level finance and accounting candidates and reveals that the best paying industries for finance professionals in
Singapore are pharmaceuticals, fastmoving consumer goods, technology, and real estate. Amongst all finance professionals, analysts and senior analysts in the tax division of large companies have the highest increase in salaries from a maximum of $100,000.00 last year to a maximum of $110,000.00 this year. Most other job titles in the finance sector such as specialists and executives in the payroll department and managers in the treasury department will experience no change in their paychecks.
Meanwhile, IT professionals who are security analysts and consultants in the financial services sector who have 4-7 years of experience can expect a pay hike of up to 12.1% in 2017, while those with more than 10 years of experience in the same department can receive as much as 14.8% increases from $150,000.00 last year to $180,000.00 this year. These IT professionals are projected to have the highest increases compared to test analysts and managers with an average of 6% increases, developers with an average of 7% increases, and IT audit and IT risk with an average of 9% increases. There are no changes for most other IT professionals such as network engineers, pre-sales and post-sales, and systems analysts.
As a general trend, candidates moving across jobs typically receive bigger hikes than those who stay. Jeffrey Ng, director, Michael
Page Singapore, says that since companies are still very cautious of increasing headcount, a majority of recruitment is for replacement positions. According to him, salary increases and bonuses are likely to be moderate this year as companies are still focused on containing costs. Job movers can expect an average of 10-15% salary increases. However, those who move even with the same pay do so because they think that the new role is more interesting and can provide them with better prospects.
“35% of finance and accounting workers in Singapore think they earn a salary that is below industry average and 44% think they are not being paid a fair salary. 40% of finance and accounting professionals in Singapore are willing to move abroad for a higher salary,” says Jones. Analysts at Robert Half think that pay does not only motivate job change within the Singaporean market, but also influence staff decisions on exploring more opportunities overseas.
On the other hand, top IT candidates are aware that they are in demand, hence they can negotiate accordingly. Skills shortages in this sector are pushing companies to adjust their salary packages to remain competitive in attracting and retaining staff. Jones says that almost half of technology professionals in Singapore are not satisfied with their salaries and think that they should be paid more with due consideration for their workload and responsibilities.
Returning Singaporean professionals across all sectors can expect a high demand and higher offers for their skills and specialisations, as Singaporean companies believe that returning talent is ideally placed to offer a global perspective to local companies seeking to make inroads in Singapore and Southeast Asia, Wright adds.
Not much pay hike this year