askST Jobs: What is a good salary increment within the same company?

In this series, business journalist Timothy Goh offers practical answers to candid questions on navigating workplace challenges and getting ahead in your career. Get more tips by signing up to The Straits Times’ Headstart newsletter.

Q: What is a good pay jump if I am staying in the same company?

What is considered a good increment within the same company ultimately depends on three factors: market benchmarks, individual performance and the organisation’s overall health.

In Singapore, annual salary increments in steady economic conditions typically range between 3 per cent and 5 per cent.

An increment above that range may be considered strong, particularly if it exceeds inflation and reflects a consistent, measurable contribution, said Mr Foo See Yang, managing director and business group head of Persol Singapore.

However, a “good” increment should not be assessed by percentage alone, he added.

“It should reflect growth in responsibilities, capability and business impact... If an employee has taken on a broader scope, led strategic projects, delivered revenue growth, or acquired specialised skills that are in high demand, a higher salary adjustment would be justified,” said Mr Foo.

“In such cases, increments in the range of 8 per cent to 15 per cent can occur, especially in competitive industries or when companies are prioritising retention of high performers.”

Mr Foo also noted that it is important to distinguish between annual merit increments and salary adjustments tied to promotion.

When an employee moves into a significantly expanded role, salary increases are typically more substantial because they reflect both performance and a change in job level.

Employees should evaluate increments within the broader context of total rewards. “Bonuses, stock options, professional development opportunities, flexible work arrangements and career progression pathways all contribute to long-term earning potential and job satisfaction,” said Mr Foo.

“A modest increment in a company that offers clear growth opportunities may, over time, be more advantageous than a larger increase in a role with limited progression.”

Ms Michelle Loke, founder and career coach at Portfolio Works, agreed that annual increments within the same role often fall in the range of 3 per cent to 5 per cent.

She said stronger performers sometimes receive 5 per cent to 7 per cent, while promotion increases are usually higher, often around 10 per cent to 20 per cent.

But the more important question is whether the increment reflects an employee’s market value and future trajectory, she added.

Many professionals react emotionally after a bonus or increment season and see a disappointing payout as a sign to leave.

“That can be too simplistic... The better question is whether staying helps you build the skills, credibility and experience needed for your next meaningful move,” said Ms Loke.

One way to judge this is to consider whether the role stretches the employee.

Ideally, about 60 per cent to 70 per cent of the job should draw on the employee’s current strengths, 20 per cent to 30 per cent should stretch them in realistic ways with the right support and room to build new skills, and only about 10 per cent should feel entirely new.

“If almost everything is familiar, you may not be maximising your learning potential. If too much feels beyond you, the role may not be set up for success,” said Ms Loke.

“A good increment should reward past performance, but a good role should also increase your future value,” she added.