Large firm may trim bonuses but bump up basic pay

Office workers crossing Maxwell Road in the central business district area.
Office workers crossing Maxwell Road in the central business district area. PHOTO: ST FILE

Workers may prefer that as they get more financial stability and flexibility

A large company accustomed to paying out generous bonuses to its workers is eyeing a change in its wage structure.

There is talk that the firm will soon take a knife to those fat bonuses, which could come to as much as several months of a worker's monthly pay - a sum far more generous than industry norms.

But it's not all grim: The company is also looking to substantially beef up the base salary for workers.

Apparently, the traditional year- end largesse is on the way out across many sectors as younger- generation employees are less easily enticed these days.

Staff today would rather get their hands on a fatter pay cheque upfront every month.

There are bills to be paid, after all, for everything from mortgages and utilities to credit cards.

Mr Tom Reid, the country manager of recruitment firm Spencer Ogden Singapore, told The Straits Times that more people are now prepared to settle for a smaller bonus - as long as their overall pay package includes a sizeable basic salary.

"For some people, a larger monthly salary provides greater economic stability and makes budgeting, financial planning and saving easier," said Mr Reid. It could also be an advantage if an employee looks for another job elsewhere, he noted.

"It gives employees more flexibility in terms of managing career progression because they are less concerned about waiting until the bonus season before they look for new opportunities."

He noted that employers are still likely to be inclined to offer potential hires a smaller salary but a larger bonus.

"These individuals tend to be self-motivated to succeed and ensure their work is of the required standard because much more of their annual income is based on their personal performance."

Expect more companies to follow suit and adopt the new trends.

• Overheard is a new weekly column about little-known corporate happenings in Singapore. Contributions welcome at stbusiness@sph.com.sg

A version of this article appeared in the print edition of The Straits Times on July 13, 2015, with the headline 'Large firm may trim bonuses but bump up basic pay'. Print Edition | Subscribe