The bumper payout - it follows a half-month bonus in July; a similar one is on the cards for March - will make the civil service a more attractive place to work.

Not only could it stem the drift of talent from the public to the private sphere, it could reverse the direction if firms act like Scrooge this Christmas.

Some bosses have dismissed the significance of the Government's move, saying that the private sector is a different entity with its own way of calculating bonuses.

Maybank Singapore, for example, has a bonus scheme linked to the company's performance and 'will not apply the same formula as the civil service', said human resources head Wong Keng Fye yesterday.

It is a similar story at air freight firm The National Forwarder (Singapore). 'We normally base the bonus on our own performance and don't use the Government as a guideline,' said managing director Rajoo Amurdalingam. The firm paid a two-month bonus last year and will probably give 21/2 months this year, depending on its performance in the next few weeks.

Remuneration consultants back the view of these bosses, saying that comparing private enterprise and the civil service is like comparing apples and oranges.

But HR experts warn that even though head honchos might dismiss the Government's generous bonus, their employees will take note, especially with resignation rates rising and job-hopping growing more rampant.

'While the corporate office might not use the civil service bonus as a benchmark, employees certainly will,' says Mr Pan Zaixian of recruitment consultancy Robert Walters.

Some firms, already facing rising wage costs and a severe labour shortage, will have tough calls to make.

SC Auto general manager Rachel Lee told the Straits Times: 'If we don't follow suit, we'll see a lot of resignations on the table.'

Wages for welders and other skilled workers at SC Auto, which designs and makes luxury coaches, have risen 7 to 10 per cent this year.

While Ms Lee says she will not cave in and hand out higher bonuses at the expense of her bottom line, she has to manage expectations. Last year's bonus was about 11/4 months.

For many small and medium-sized enterprises (SMEs), which need to manage capital and cover rising costs for raw materials, demands for higher wages and bonuses could hamstring cash flow.

'I don't think SMEs will raise bonuses because of the Government's move,' said Mr Kang Puay Seng, a co-founder of soya drink maker Mr Bean. 'They have to prepare for rainy days.'

This year, his commodity costs, for sugar and beans, for instance, have risen sharply, while rents for his outlets have soared by 20 per cent. With these costs constricting the balance sheet, bonuses are likely to be similar to those paid last year, he said.

Mr Tim Hird, the managing director of recruitment agency Robert Half Singapore, said companies are employing more creative strategies to attract, retain and manage talent.

These include providing flexi-work benefits, hiring on a contract basis, using older workers and implementing structured career development plans.

gabrielc@sph.com.sg

WITH ADDITIONAL REPORTING BY GRACE NG AND ALVIN FOO

'While the corporate office might not use the civil service bonus as a benchmark, employees certainly will.'

MR PAN

UNHAPPY STAFF

'If we don't follow, we'll see a lot of resignations on the table.'

MS LEE

SME CRUNCH

'I don't think SMEs will raise bonuses because of the Government's move. They have to prepare for rainy days.'

MR KANG

DOING IT OUR WAY

'We normally base the bonus on our own performance and don't use the Government as a guideline.'

MR RAJOO