[SINGAPORE] Singapore's economy may be facing headwinds and inflation's muted but companies in the South-east Asian city-state are set to step up salary increases next year in a bid to retain staff, according to a survey.
The overall increase projected for 2020 is 3.7 per cent, up from a 3.6 per cent rise this year, according to Mercer LLC, which conducted the survey across industries from banking and finance to real estate.
One in three companies now pay retention bonuses, up from one of four in 2017, it said.
Mercer’s annual compensation and benefits benchmarking study identifies key remuneration trends and predictions for hiring and pay for the year ahead. This year, nearly 1,000 companies participated in Mercer Singapore’s survey.
Trade-dependent Singapore has posted slower economic growth this year amid the fall-out from the US-China trade war, although the government forecasts a recovery in 2020. At present, inflation remains less than 0.5 per cent on-year, far below the salary increases projected in the Mercer survey. Like a number of its Asian counterparts, the city-state's workforce is aging.
"Talent pools are shrinking," according to Mercer, which said that companies may struggle to keep workers even after offering more compensation.
There needs to be a shift toward "more holistic talent strategies that acknowledge pay as only one means of differentiation and motivation", Kulapalee Tobing, career products leader, Singapore, said in a statement.
Income growth in Singapore has slowed this year as the labour market softened, according to preliminary data last week. The real median income of full-time employed residents weakened to 2.2 per cent in June 2019 from 4.4 per cent in the same period last year, the Ministry of Manpower said.