SINGAPORE, Jan 6 — Some 30 per cent of employers in Singapore are planning to give no salary increases in 2021, a worldwide study of salary increases has found.
This is a higher proportion compared with the rest of the world — around 16 per cent of companies worldwide are planning to skip wage increments altogether in 2021, said the study by global consulting firm Korn Ferry released on Wednesday (Jan 6).The salary survey had collected data from 25,000 organisations in more than 150 countries. The study concerns planned increases for 2021 — actual salary raises depend on many factors, including the pace of economic recovery.
TODAY has asked Korn Ferry how many Singapore respondents there are and what sectors they are in.The study discovered several global trends:
- More firms are planning pay freezes in 2021 than 2020
- Salary increments, if any, will be lower than previous years
- Organisations largely plan to channel their limited funds to increments for talents and those performing critical functions
Of the Singapore employers who participated in the study, less than half (46 per cent) said they are planning to give an increase to at least nine out of 10 staff this year.These companies are planning pay increases amounting to an increment of 2.1 per cent in real terms, which is still lower than the 3.1 per cent salary increase implemented in 2020, the study said.
Overall, Singapore respondents are planning a 2 per cent increase in terms of median wages, not adjusting for inflation.This puts Singapore ahead of countries like France (1.3 per cent) and the United Kingdom (1.9 per cent), but behind all other Asian jurisdictions except for Japan and Hong Kong (both 2 per cent).
The study noted that in countries where inflation is particularly low, employees may still see a larger increase in their real pay. Singapore’s inflation rate is expected to be between -0.5 and 0 per cent in 2020, based on official forecasts.Mr Kartikey Singh, senior client partner at Korn Ferry Singapore, noted that work in a recovering economy will be largely contractual, temporary, services-led and driven by technology.
“While the overall pay increases might look sanguine, talent scarcity for areas like product and application development, cybersecurity in certain sectors like e-commerce, technology and fintech can drive significant pay premiums for these job categories,” said Singh.
Such a trend will force companies to practise differentiated pay strategies for various employees and skill groups, he added.Globally, a third of the respondents polled said they will provide increases only to less than half of their employees. Only 35 per cent of companies said that all their staff will be eligible for salary increases.
Don Lowman, Korn Ferry's global leader of rewards and benefits, said: “More than ever, it will be important for organisations to ensure that their employees continue to feel valued and rewarded.”
As financial resources are constrained amid the Covid-19 pandemic, organisations need to focus more on a “total rewards” approach, he added.Such an approach includes non-financial rewards, such as career development opportunities, training and mentorship, as well as having an energising work environment and meaningful work for employees.
“Korn Ferry research has found that while financial rewards are key to attracting talent into organisations, non-financial rewards can be key differentiators in retaining talent,” said the consultancy firm. — TODAY