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.

Singapore Business Review - - CONTENTS -

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.

Mon­i­tor­ing mo­ti­va­tions

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

Chris­tine Wright

Michael Smith

David Jones

Jef­frey Ng

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