A SMALLER proportion of Singapore-based employers will pause wage increments in 2021, compared to 2020, according to the results of two studies released on Thursday.
In Mercer's survey, which polled 992 companies across 16 industries in Singapore, one-quarter of respondents said they plan to introduce or continue with salary freezes next year, a tad fewer than the 30 per cent that did so this year.
Likewise, ECA International's poll found that 22 per cent of employers will continue to freeze salaries next year, down from 36 per cent this year.
As for pay cuts, about 3 per cent of employers said they intend to implement them next year, compared with the 29 per cent who made salary reductions this year, according to the annual Total Remuneration Survey by consulting firm Mercer.
However, most organisations are taking a wait-and-see approach, as they continue to tread with caution on pay raises while navigating the Covid-19 pandemic's impact.
The overall salary increase projected for 2021 in Singapore will soften slightly to 3.5 per cent, from 3.6 per cent this year, Mercer's study found.
For professionals, managers, executives and technicians (PMETs), wages are likely to go up by 3.6 per cent on average, while non-PMETs may see slightly smaller increments of 3.4 per cent, Mercer told The Business Times. The 992 companies polled by Mercer employed a total of nearly 260,000 individuals, of which 32 per cent were non-PMETs.
"Businesses remain cautiously optimistic and are considering more holistic talent strategies to energise their employees in the new shape of work," Mercer chief executive for Singapore Peta Latimer said, adding that some are rolling out additional incentives. "Leaders are also looking ahead to attract and retain talent required to accelerate business digitalisation."
Salaries in the banking and finance sector as well as the high-tech sector are expected to increase at a stable rate in the year ahead.
The logistics and consumer goods industries will likely see slightly bigger increments of 3.3 per cent and 3.5 per cent respectively, compared to the increases of 3.1 per cent and 3.4 per cent this year. This "correlates with a shift in consumer purchasing behaviours to online", said Mercer career products leader for Singapore, Kulapalee Tobing.
In contrast, wage growth is expected to slow in the life sciences, real estate, chemicals and lifestyle retail sectors next year. Employees in lifestyle retail may experience the sharpest dip in increments, with salaries rising 2.9 per cent in 2021 compared to the 3.3 per cent increase in 2020.
Ms Tobing noted that the prediction of a smaller salary growth in the lifestyle retail industry was unsurprising, given the shift to online purchasing behaviours, lower discretionary spending capacities and reduced leisure activity due to the pandemic.
Meanwhile, in the global context, ECA's survey found that workers in Singapore may receive one of the biggest salary increases in the world next year. Singapore employers in the ECA poll said they plan to raise wages by 3 per cent, or 2.7 per cent in real terms after factoring in the 0.3 per cent predicted inflation rate for 2021.
Based on forecast pay raises in real terms, Singapore, Thailand and Colombia all rank third globally, after Indonesia (3.8 per cent) and Israel (2.8 per cent).
ECA's Salary Trends Survey collected information from over 370 multinational firms in 68 markets.
The expected rise in Singapore workers' salaries is largely due to fewer firms freezing wages, said Lee Quane, ECA regional director, Asia. Moreover, the city-state has experienced consistently low inflation in recent years, which will result in higher real salary increases compared to countries with higher inflation rates in Asia-Pacific, such as Hong Kong, Mr Quane added.
Mercer also found that employers are facing intensifying competition for talent to support the digitalisation of their businesses. The most in-demand are data scientists, IT solution architects, business intelligence analysts and cybersecurity engineers.
Roles that support digitalisation will attract salary premiums, especially at senior and specialist levels, compared to the general market. For example, specialists who have capabilities in cybersecurity incident-response analysis will get wages that are 33 per cent higher than the median annual base salary, while specialists in robotic process automation will get a 30 per cent premium over the median level, Mercer said.