A tale of two wages: PAY rise can go up to 15% whilst ex­pats’ salaries fall 15%

Ma­jor­ity of the sec­tors in Sin­ga­pore are poised for a sta­ble rate of salary in­creases at 3%-15% this year. On an­other end of the spec­trum, ex­pats’ salaries are on a con­tin­u­ous de­cline.

Singapore Business Review - - CONTENTS -

Look­ing at the big­ger pic­ture of Sin­ga­pore’s re­cruit­ment and hir­ing en­vi­ron­ment, ma­jor­ity of the sec­tors are poised for a sta­ble rate of salary in­creases, which spells good news for em­ploy­ees and job seek­ers. For the ac­count­ing and fi­nance sec­tor, a re­port by Robert Wal­ters noted that pro­fes­sion­als in this sec­tor are likely to get 10% to 15% salary in­crease in the next 12 months after reg­is­ter­ing mod­est lev­els of hir­ing in 2017 as more com­pa­nies un­der­went re­struc­tur­ing, stream­lin­ing, and out­sourc­ing of their ac­count­ing func­tions.

Re­cruit­ment for Sin­ga­pore’s hu­man re­sources sec­tor, how­ever, re­mained stag­nant in 2017, ac­cord­ing to Robert Wal­ters, es­pe­cially for mid-to-se­nior level po­si­tions as com­pa­nies con­tinue to stream­line HR teams and the on­go­ing trend of off­shoring ad­min­is­tra­tion func­tions.

The IT sec­tor, will see a high level of de­mand for busi­ness and con­sumer-fac­ing pro­fes­sion­als who have deep learn­ing and ma­chine learn­ing skills, with the ris­ing trends of dig­i­tal trans­for­ma­tion, tech­no­log­i­cal in­no­va­tion, and ar­ti­fi­cial in­tel­li­gence. Em­ploy­ers in the sec­tor will also look for UX/UI pro­fes­sion­als, par­tic­u­larly on front-end de­vel­op­ment, as well as cy­ber­se­cu­rity ex­perts. In terms of salary, in­crease is ex­pected to be be­tween 5% to 15%.

For the le­gal sec­tor, hir­ing trend was rel­a­tively stag­nant in 2017 com­pared to 2016 partly due to strin­gent re­quire­ments for re­cruit­ing le­gal pro­fes­sion­als. Year-onyear salary in­creases ranged be­tween 3% to 7% on av­er­age, and this is ex­pected to con­tinue in the next 12 months.

For the sales and mar­ket­ing sec­tor, on the other hand, hir­ing lev­els re­mained pos­i­tive within the fast mar­ket and con­sumer goods, re­tail, lux­ury, and health­care seg­ments in 2017. Can­di­dates pro­fi­cient in cor­po­rate strat­egy de­vel­op­ment and strate­gic in­no­va­tion will be in de­mand, par­tic­u­larly in the health­care seg­ment. Salary in­creases are likely to be be­tween 10% to 15% on av­er­age.

Toby Fowl­ston, manag­ing di­rec­tor for South­east Asia at Robert Wal­ters, noted that to se­cure high-po­ten­tial tal­ent, hir­ing man­agers are ad­vised to make fast and strate­gic hir­ing de­ci­sions, us­ing en­gag­ing and seam­less in­ter­view pro­cesses to ex­pe­dite re­cruit­ment. “Top tal­ent can be re­tained with good suc­ces­sion plan­ning and ca­reer pro­gres­sion op­por­tu­ni­ties, as well as mone­tary in­cen­tives,” he reck­oned.

Mean­while, mod­er­ate hir­ing lev­els were ob­served in the bank­ing and fi­nan­cial ser­vices sec­tor in 2017 with more func­tions, par­tic­u­larly in the bank­ing in­dus­try, tran­si­tioned off­shore, whilst merg­ers and ac­qui­si­tions also adding to the slow­down in hir­ing. De­spite this, pri­vate

Pri­vate bank­ing bonuses rose 5-7% yoy in 2017.

bank­ing con­tin­ues to gain mo­men­tum in the lion city with bonuses of a good-per­form­ing pri­vate banker clock­ing in some­where around a whop­ping 50% of the base salary. This means that a manag­ing di­rec­tor with more than 17 years job ex­pe­ri­ence can earn as much as $200,000 in bonuses alone.

Bank­ing bonuses

“The bonus on that would av­er­age 40-50% (given their book) which means in to­tal Manag­ing Di­rec­tors could eas­ily be re­ceiv­ing a pack­age (base salary, bonus and longterm in­cen­tives) of close to SGD 1 - 1.5 Mil­lion,” said Ni­lay

Khan­del­wal, re­gional di­rec­tor of Michael Page Sin­ga­pore Ex­ec­u­tive di­rec­tor or SVP lev­els can earn around $137,500 in bonuses sep­a­rate to their ex­ist­ing com­pen­sa­tion pack­ages. Those in the di­rec­tor and as­so­ciate di­rec­tor lev­els can earn in be­tween $100,000 to $150,000 in bonuses alone whilst an as­so­ciate client ad­vi­sor with around two to six years of ex­pe­ri­ence could sim­i­larly en­joy hefty $48,000.

Pri­vate bank­ing bonuses rose 5-7% YOY in 2017, ac­cord­ing to Krista Es­pal­don, se­nior con­sul­tant & re­gional lead for pri­vate bank­ing at Mor­gan Mckin­ley. Hefty bonus pack­ages help pri­vate bank­ing re­cruiters at­tract and re­tain top tal­ent that could draw in wealthy clients amidst grow­ing de­mand for per­son­alised bank­ing ser­vices and lim­ited man­power to plug the de­mand.

How­ever, gone are the days of purely cash pay-out bonuses as a num­ber of bonus pack­ages are ac­tu­ally bro­ken down into 60-40% cash and stocks/shares which are vested in two to three years.

“Quite a bit of the bonus pay-out is de­ferred over a

3 - 5 year pe­riod and if the bank is listed, then they do of­fer shares too. Usu­ally about 25% - 40% of the bonus is de­ferred over a 3- 5 year pe­riod and de­pend­ing on the bank, it is paid out in a com­bi­na­tion of stocks and cash,” said Rahul Sen, global head of pri­vate wealth man­age­ment at The Omerta Group.

What re­mains the same is the more gen­er­ous com­pen­sa­tion pack­ages of­fered by for­eign pri­vate bank­ing play­ers who dole out around 10-13% in to­tal take home pay (in­clud­ing base salaries) as op­posed to large lo­cal pri­vate banks who pay out a de­cent 8 to 12%, ac­cord­ing to Es­pal­don. “It is all per­for­mance-linked so it would range any­where from 30% to 80%, with 50% be­ing the av­er­age. If you are at the top of your game in pri­vate bank­ing, you do make a lot of money,” said Khan­del­wal.

Crazy, poor ex­pats

If wages and bonuses are on a steady rise for Sin­ga­pore­ans, ex­pats are on the other side of the spec­trum with av­er­age ex­pat in­come fall­ing 15% to US$117,904 in 2017. From be­ing the fourth high­est paid ex­pats in the world, Sin­ga­pore ex­pats are now tenth glob­ally in terms of salary pack­ages.

Pre­vi­ous find­ings of the sur­vey re­vealed Sin­ga­pore is the best coun­try for ex­pats, but across HSBC’S league ta­bles, it was de­feated by other coun­tries. In the over­all eco­nomics league ta­ble, Sin­ga­pore ranked sec­ond with a score of 0.61 in 2016. In 2017, its score im­proved to 0.64, but it fell to fourth place. The rank­ings are based on ques­tions on an ex­pat’s per­sonal fi­nances, views on the lo­cal econ­omy, and their work­ing life.

Three-quar­ters of ex­pats (73%) say the coun­try of­fers bet­ter earn­ings po­ten­tial than their home coun­try. In­deed, they re­port a 42% in­crease in their an­nual in­come since the move to an av­er­age of al­most US$118,000. This fig­ure is US$18,000 higher than the av­er­age ex­pat in­come. On av­er­age, ex­pats in Sin­ga­pore earn US$139,000 which is sig­nif­i­cantly higher than the global av­er­age of USD97,000. Ex­pats in the coun­try can also en­joy ben­e­fit pack­ages from their em­ploy­ers, with 73% of ex­pats re­ceiv­ing at least one ben­e­fit as part of their con­tract, com­pared with 67% glob­ally

Man­power crunch

De­spite the over­all rosy out­look on salaries, the city-state is still grap­pling with a gap­ing num­ber of job va­can­cies es­ti­mated at around 48,800 in 2017, ac­cord­ing to statis­tics re­leased by the Min­istry of Man­power, with the ac­com­mo­da­tion and food ser­vices, and ad­min­is­tra­tive jobs in se­cu­rity and in­ves­ti­ga­tion reg­is­ter­ing some of the high­est va­cancy lev­els at 6.4% and 4.9% re­spec­tively in Q4. As a con­se­quence, a grow­ing num­ber of in­dus­tries, par­tic­u­larly in the hos­pi­tal­ity sec­tor, have been turn­ing to tech­no­log­i­cal advancements like AI and ro­bot­ics to fill the se­vere man­power gap. The po­lice force is also in the process of fully au­tomat­ing all neigh­bour­hood po­lice posts that can pro­vide 24/7 ac­cess to rou­tine po­lice ser­vices like sub­mit­ting crime re­ports and lost-and-found prop­erty which frees up more of­fi­cers to be re­de­ployed to the ground. The gov­ern­ment is sim­i­larly de­ploy­ing AI sys­tems for bor­der se­cu­rity and ma­chine learn­ing for ar­du­ous doc­u­ment au­dits.

“Tal­ent crunches will con­tinue to ap­pear wher­ever tech­no­log­i­cal in­no­va­tions re­quire new skills and new ways of or­ga­niz­ing pro­duc­tion, de­liv­er­ing goods and ser­vices, ac­quir­ing and con­sum­ing them. The only way they can be ad­dressed in the longer run is hence through changes in ed­u­ca­tion: teach­ing chil­dren how to learn

(eg through cod­ing), and al­low­ing adults to con­stantly ac­quire new skills (life-long learn­ing),” said Bruno

Lan­vin, Ex­ec­u­tive Di­rec­tor for Global In­dices, INSEAD

& Paul Evans, INSEAD Pro­fes­sor and Aca­demic

Di­rec­tor for GTCI (Global Tal­ent Com­pet­i­tive­ness In­dex).

In ad­di­tion to the lack of hu­man re­sources, skills short­age re­mains a press­ing prob­lem plagu­ing re­cruiters and busi­nesses across in­dus­tries in the lion city. “Within fi­nance and ac­count­ing, our re­search has found 100% of CFOS in Sin­ga­pore find it chal­leng­ing to source skilled pro­fes­sion­als – mak­ing it of equal im­por­tance that com­pa­nies have a proac­tive re­cruit­ment and re­ten­tion strat­egy in place,” Robert Half Sin­ga­pore manag­ing di­rec­tor Matthieu Im­bert-bouchard said.

Tech­no­log­i­cal revo­lu­tion

“Dig­i­tal trans­for­ma­tion will con­tinue to be a game changer in the re­cruit­ment en­vi­ron­ment,” said Jaya Dass, manag­ing di­rec­tor at Rand­stad Sin­ga­pore. “Em­ploy­ers are look­ing to in­vest in new tech­nolo­gies to help im­prove their at­trac­tion and re­ten­tion ef­fi­cien­cies.”

The bank­ing sec­tor is also in the same boat as con­sumers ex­pec­ta­tions and de­mands for a seam­less bank­ing ex­pe­ri­ence are also ac­cel­er­at­ing the pace of up­skilling in the sec­tor, noted Man­pow­er­group Sin­ga­pore coun­try man­ager

Linda Teo.

This grow­ing tech­no­log­i­cal revo­lu­tion is al­ready dis­rupt­ing var­i­ous in­dus­tries in Sin­ga­pore. For in­stance, the in­sur­ance in­dus­try has, for years, been tran­si­tion­ing to a more dig­i­tal land­scape with star­tups and even full-pledged in­sur­ance firms, like Sin­ga­pore Life, al­ready em­brac­ing in­sur tech as their core busi­ness model, and not just a com­po­nent of their over­all op­er­a­tions. This is also true in the le­gal and fi­nan­cial sec­tors with the rise of le­gal tech and fin­tech star­tups and busi­nesses.

This, ac­cord­ing to Rob Bryson, manag­ing di­rec­tor for Robert Wal­ters Sin­ga­pore, will con­tinue to drive ac­tiv­ity, par­tic­u­larly in the in­for­ma­tion tech­nol­ogy (IT) sec­tor. “We be­lieve the IT job mar­ket will re­main ac­tive in 2018,” he said, adding that busi­nesses will con­tinue to im­prove their dig­i­tal pro­cesses, gen­er­at­ing per­ma­nent and tem­po­rary op­por­tu­ni­ties for peo­ple with both tra­di­tional and new tech­nol­ogy skills. Some of the key in­dus­tries and sec­tors that are driv­ing this dig­i­tal trans­for­ma­tion in Sin­ga­pore in­clude fi­nan­cial ser­vices, lo­gis­tics, and e-com­merce.

Lo­cal and multi­na­tional firms’ drive for in­creased dig­i­tal trans­for­ma­tion and tech­no­log­i­cal in­no­va­tions is also in line with the Sin­ga­pore gov­ern­ment’s drive to strengthen tech­no­log­i­cal in­fra­struc­ture in a bid to make the city-state a “smart na­tion.” This com­pre­hen­sive ef­fort, both from the pub­lic and pri­vate sec­tor, is only go­ing to make Sin­ga­pore an at­trac­tive em­ploy­ment des­ti­na­tion for tech­nol­ogy pro­fes­sion­als.

“We will see a de­mand for dig­i­tal pro­fes­sion­als, soft­ware de­vel­op­ers, data sci­en­tists, as well as cy­ber­se­cu­rity spe­cial­ists,” said Diana Low, di­rec­tor at Page Ex­ec­u­tive Asia. “The tech­nol­ogy sec­tor will see con­tin­u­ous de­mand. An in­creas­ing num­ber of com­pa­nies are un­der pres­sure to drive trans­for­ma­tion in the dig­i­tal sec­tor and also fur­ther in­vest in their IT sys­tems.”

This sen­ti­ment is echoed by Im­bert-bouchard, when he said that Sin­ga­pore’s shift to­wards dig­i­tal­i­sa­tion is con­tin­u­ing and will con­tinue to drive high de­mand for pro­fes­sion­als with niche skills and ex­per­tise in 2018.

Can­di­dates pro­fi­cient in cor­po­rate strat­egy de­vel­op­ment and strate­gic in­no­va­tion will be in de­mand in the health­care seg­ment with salary in­creases be­tween 10% to 15% on av­er­age.

Ro­bie is a ro­bot em­ployed by Park Av­enue ho­tels. He trans­ports used/clean li­nen, gen­eral waste as­sowure­clel:ah­sayb­su­alk­siya room items (bot­tled wa­ter, bed top­pers,.fur­ni­ture, etc.) in be­tween floors.

Paul Evans

Bruno Lan­vin

Krista Es­pal­don

Ni­lay Khan­del­wal

Matthieu Im­bert­bouchard

Toby Fowl­ston

Rob Bryson

Linda Teo

jaya Dass

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