SINGAPORE - Salaries in Singapore will go up again next year but with talent pools shrinking, companies are having to resort to other incentives to retain staff, according to a survey by global consultancy firm Mercer.
The overall salary increase projected for 2020 is 3.7 per cent, up slightly from 3.6 per cent in 2019, said the firm in its annual Singapore Total Remuneration Survey.
"Faced with the possibility that this alone may be insufficient to achieve retention of employees and recognise their contribution, companies are turning to other incentives in addition to salary increments," said the human resources consulting firm.
Mercer's survey also revealed a continued upward trend of companies in Singapore turning to retention bonuses to keep talent, with one in three companies doing so in 2019, compared with one in four in 2017.
This trend correlates with hiring from outside becoming increasingly expensive, Mercer noted.
Companies are paying 10.6 per cent more for executive candidates and 11.6 per cent more for management candidates if they join at the same level, said Mercer. This premium could be up to 14.4 per cent and 15.3 per cent respectively if the candidate is joining at a higher level, it added.
"The key findings of our survey show that the acceleration of change and disruption across industries and businesses is having a flow-on effect on the way companies are approaching their market competitiveness from an employee perspective, particularly as talent pools are shrinking," said Ms Kulapalee Tobing, Mercer's career products leader for Singapore.
This year, nearly 1,000 companies participated in the survey, which identified key salary trends and predictions for hiring and pay for the year ahead. Two new industries, hospitality and construction, were also added to the survey, bringing the number of industries covered to 19.
Across industries surveyed, consumer goods, lifestyle retail, and life sciences recorded small upward swings in salary increases, compared with 2019. Voluntary turnover rates were similarly projected to drop or remain the same, with those of the chemical and aerospace industries projected to be as low as 8.2 per cent.
"There needs to be a shift from developing isolated reward initiatives towards more holistic talent strategies that acknowledge pay as only one means of differentiation and motivation," said Ms Tobing.