SG Biz Cautious About 2021 Salary Increments

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Caution is the mantra that many Singapore businesses will follow when looking at salary increments in 2021.

The recent Mercer survey, titled Total Remuneration Survey (TRS), showed that 25% of businesses would implement or continue salary freezes while 3% will implement salary reductions in 2021. The drop is a marked improvement over 2020 when 30% implemented salary freezes and 29% made salary reductions.

But the survey also noted that most Singapore businesses are taking a wait-and-see approach.

Peta Latimer, Mercer’s chief executive officer for Singapore, said, “Businesses continue to remain cautiously optimistic about the future and are considering more holistic talent strategies to energize their employees in the new shape of work, including additional incentives. Leaders are also looking ahead to attract and retain the talent required to accelerate business digitalization.”

Salary increments to differ across industries

This year, base salaries moved significantly less than previous years, mostly at the management and executive levels, growing only 2% and 1.2% respectively between 2019 to 2020, compared to 6.8% and 7.% for the 2018 to 2019 period.

However, looking to the year ahead across the industries surveyed, the Banking & Finance and High-Tech sectors’ increments will remain stable. In contrast, the Logistics and Consumer Goods industries expect incremental growth (3.3% and 3.5% respectively to 3.1% and 3.4% in 2020).

The Life Sciences, Real Estate, Chemicals, and Lifestyle Retail expect a dip in increments, with Lifestyle Retail expecting the sharpest drop, from 3.3% in 2020 to 2.9% in 2021.

 “The incremental growth in salary increases projected for 2021 in the Logistics and Consumer Goods industries correlates with a shift in consumer purchasing behaviors online. The steeper decline in the Lifestyle Retail industry is unsurprising given this shift, as well as lower discretionary spending capacities and reduced leisure activities resulting from the pandemic,” said Kulapalee Tobing, career products leader for Singapore at Mercer.

Rewarding digital talent

The survey found the COVID-19 pandemic has accelerated digitalization across all Singapore businesses. Many organizations are facing increased competition for talent to support digitalized business initiatives.

Mercer’s survey revealed that the most in-demand roles are for Data Scientists, IT solution Architects, Business Intelligence Analysts, and Cyber Security Engineers. Compared to the general market, roles that support digitalization will attract salary premiums, especially at senior and specialist levels.

For example, specialists with cybersecurity incident response analysis capabilities and robotic process automation are expected to receive a 33% and 30% premium, respectively, on the median annual base salary. 

“Organizations will face increased competition for digital talent as they compete for talent with start-ups and eCommerce businesses, the gig economy, and the government. The good news is that the government remains committed to developing the nation’s tech ecosystem and recently announced plans to launch Tech.Pass, a new employment pass to attract highly skilled technology professionals to Singapore to strengthen its position as a leading tech hub in the region,” said Tobing.

Focus on benefits for attraction and retention

Although affordability is a crucial criterion for making decisions on salary increases, many organizations take a holistic view to redesign the work experience for their employees, including providing additional incentives and benefits.

Nearly a third of Singapore employees surveyed (30%) are looking to add or expand telemedicine or digital care to their health programs in 2021 to respond to the acceleration of digital health usage. For example, telemedicine providers such as Doctor Anywhere reported a 156% increase in active digital users, and MyDoc recorded a 147% increase in the last year.

Additionally, 50% of Singapore employees surveyed will provide for or reimburse their employees for remote working expenses and are considering increased flexibility for onsite and remote working. Coverage for remote working expenses includes internet service, laptops, and mobile phones.

Image credit: iStockphoto/bankrx