SALARY increases are likely to outstrip inflation this year so workers should be able to stay ahead of the rising cost of living, said a new report yesterday.
Consulting firm Towers Watson said company budgets for salary increments here are expected to go up by 4.5 per cent on average - a tad higher than the expected inflation rate of 3.8 per cent.
This means real wage growth is expected to stay positive this year.
The results - from an online survey in February and March - were gathered from about 1,600 responses from 18 economies across the Asia-Pacific region.
It found real wage growth in Hong Kong is expected to be among the slowest in the region, with projected salary rises of 4.5 per cent, just above inflation of 4.4 per cent. China has the largest gap between projected salary increases and inflation: Inflation is tipped to hit 4.3 per cent this year while salaries are estimated to shoot up 8.8 per cent.
Mr Andrew Lee, chief executive of Zingrill Holdings, which owns restaurant brands such as Seoul Garden and Breeks Cafe, said Singapore firms have to be "pragmatic" about wage rises, given the tight job market on the one hand, and rising labour costs on the other.
"While we want to make sure that the salaries we pay are comparable to the market rate, in the long run, this can be sustained only if the company raises the productivity of its workers," he said. "We have to work with staff to upgrade their skills, to create a win-win situation for both parties."
Mr David Ang, executive director of the Singapore Human Resources Institute (SHRI), said wages are expected to rise by an average of 4 per cent, based on a survey conducted by SHRI and Remuneration Data Specialists last December.
"This is quite a reasonable increment, considering that inflation might still be at a level where companies feel they have to meet employee expectations to increase real salaries," he said. Mr Ang added that companies have to make use of salaries to "differentiate between those who are key to the organisation and those who are just maintaining the same levels... There is still a shortage of talented people."
Mr Patrick Tay, MP for Nee Soon GRC, said sectors that are growing more quickly are likely to also have faster rates of salary growth, compared with those where growth has been tepid.
"Employers are cognisant of the tight labour market, and will have to respond accordingly if they want to attract talent," added Mr Tay, who is also the professionals, managers and executives unit director at NTUC. "Given the recent Employment Pass tightening measures, employers in some sectors would also be trying harder to retain the (professionals, managers and executives) working for them."
Mr Tay also noted that annual salary recommendations coming from the National Wages Council later this year are also likely to have an impact.