Expecting the global Great Resignation phenomenon to play out in full next year, employers in Singapore are reverting salary increments and payroll budgets to near pre-pandemic levels in a bid to hold on to their employees, as well as fill vacancies next year.
Publishing its Mercer's 2021 Total Remuneration Survey last Wednesday, Mercer Singapore said workers here can expect pay rises of 3.5 per cent next year, a hairline shy of 2019's 3.6 per cent.
As for total payouts that cover expenses such as salary increments, promotion raises and market adjustments, human resources teams are planning to set aside 4.4 per cent more next year. That budget exceeds the 4.3 per cent increase in 2019, the year before the Covid-19 pandemic.
The projections, garnered from 961 companies - of which 800 are multinationals - across 18 industries with operations in Singapore, mirror trends that have shown up in many remuneration surveys, some of which also highlight that a majority of workers in Singapore are entertaining imminent prospects of quitting their jobs.
Employment Hero, a human resources platform, released earlier this month the results of a survey it did with 1,005 Singapore workers, which showed that 59 per cent are planning to look for a new role.
Among these workers, 77 per cent received a pay cut during the pandemic. Most respondents - 38 per cent - cited a lack of career opportunities for wanting a change, while the lack of a pay rise ranked second at 34 per cent.
Unappreciative or difficult bosses, toxic company culture, burnout, lack of training opportunities or rigidity also made the list.
Mr Dylan Wong, 36, left his real estate employer after it imposed a salary freeze, and paused wage increments and promotions. He became a self-employed financial services adviser in April, and does not plan to return to his former role.
His new job, he said, gives him "better control of my career and time". "There is greater autonomy and, most importantly, the fulfilment of doing something that can impact someone positively."
This is going to be an issue employers face, said Mercer Singapore's reward products leader Mansi Sabharwal. "Singapore is not just about the Great Resignation. There is a talent shortage."
If Singapore's borders remain closed with work permit restrictions, the gap between vacancies and suitable candidates will keep widening, she said. The consumer goods, technology and life sciences sectors are experiencing the highest rates of resignations.
Mr Lam Yi Young, chief executive of the Singapore Business Federation, said that in tandem with a recovering economy, the labour crunch is especially acute in sectors where Singapore lacks an adequate talent pool, such as technology, as well as industries that are more reliant on foreign workers.
"With the gradual reopening of borders, businesses look forward to an increase in inflow of foreign workers, which can help address part of the manpower crunch. But the manpower situation is expected to continue to be tight in 2022," he added. "Businesses will need to push ahead with transformation efforts to increase productivity, and with efforts to upskill and develop their workforce."
Even though the projected 11.2 per cent attrition rate this year is in line with the average year - 2019 was 12 per cent, for instance - the actual number may turn out higher, as the projection was extrapolated from data for only up to June, said Ms Sabharwal.
Employers began feeling the heat of losing workers since April, she added. "They started losing people much, much faster than they could even hire. Whoever left the organisation last year, there were no replacement hirings. Companies were cautious on their budgets. They also did not keep up their hiring budget from last year, so it created a gap."
Even with a near pre-pandemic pay increment of 3.5 per cent, with all-items inflation rates hovering at around 2.5 per cent, real wage growth next year could be just about 1 per cent. Employers may need to do better, as well as offer more in career advancement opportunities, employee engagement, flexible work arrangements, and skills training, Ms Sabharwal said.
"Throwing money at candidates to attract talent or giving mediocre adjustments to existing staff is more a knee-jerk reaction or a short-term solution, she said.
"Workers are looking at future work and see where they could be the next 10 years. They are becoming more cautious about what they want to do with work life."