SHRI/RDS 2013 Survey on Business Prospects/Wage Increase/Bonus, Recruitment & HR Career Attractiveness.
SHRI/RDS surveyed 141 companies in September 2012 to find out whether the impending economic slowdown have affected their business prospects, wage, bonus and recruitment plans since our previous survey findings 3 months ago.
Companies were also asked for their views on the attractiveness and potential earnings of HR professionals.
2.0 Summary of Key Findings
Sentiment only slightly less optimistic despite expectation of slowdown.
2.1 Many companies have moderated their expectations somewhat compared to 3 months ago. Consequently, wage increases, bonus and recruitment plans have been moderated slightly. Unfortunately, due to increased uncertainty, slightly more companies have frozen wages. The companies that have retrenched or are planning to retrench staff have also increased slightly.
2.2 The basic wage increase in 2012 will average 4.0% for the full year, slightly lower than the 4.1% reported 3 months ago. For next year 2013, the basic wage increase is expected to remain at 4.0%.
2.3 Variable bonuses (excluding AWS) are expected to average 1.6 to 2.0 months this year, unchanged from 3 months ago. For 2013, they are expected to drop slightly to 1.5 to 1.8 months, slightly lower than that projected earlier.
2.4 The lower wage increase and bonus this year means a total wage increase of only 1.1% and with the consumer price index expected to be around 4.5%; there will be a drop in real wages of around 3.4%.
For 2013, the total wage increase is expected to be 2.6% and with inflation expected to be around 3.5% to 4.5%, real wages are likely to drop by 0.9% to 1.9%.
2.5 On recruitment, 78% of companies hired or planned to hire staff this year (lower than the 83%; reported 3 months ago), and for 2013, only 56% are expected to hire.
2.6 This year, 12% of companies retrenched or plan to retrench staff (more than the 8% of 3 months ago). For 2013, due to economic uncertainty, most companies are not able to make any projection on retrenchment.
2.7 Staff turnover is reported at 5% to 8% this year, slightly higher than that reported in Jun (4% to 6%). Staff turnover is expected to decline to 4% to 6% next year.
2.8 Entry-level salaries for Diploma qualification and above increased by 0.6% to 5.6% compared to 3 months ago; those for GCE N, PSC (Secretarial), Higher Nitec remained unchanged; while GCE O, GCE A and Nitec dropped by 0.1% to 6.7%
2.9 On the issue of HR career attractiveness, almost all the respondents agree that HR function is as important as Finance or Marketing,
- but less than half of them think HR salaries are currently as attractive as those of Finance and Marketing,
- however, the chances of salary and career advancement for HR professionals are rated quite highly.
3.1 Business Prospects
Current: 78% of companies reported satisfactory or better business prospects lower than the 83% three months ago
- the Education sector was the most satisfied sector
21% of companies reported unsatisfactory business prospects, higher than the 17% three months ago.
- the least satisfied sector was Electronics Components Trading
Asia Pacific, Japanese and local companies were somewhat less satisfied than 3 months ago while European and US companies reported slightly better prospects than 3 months ago.
Next 6 months: 16% of companies expect prospects to improve, 74% expect no change while 10% expect prospects to worsen.
- F&B/Hospitality sector is the most optimistic, (was one of the most pessimistic sector in June, 29% expect prospects to worsen)
- Constructions & Related sector is the most pessimistic.
US companies are most optimistic over next 6 months, while Japan companies are the least optimistic.
3.2 Basic Wage Increase
The wage increase this year (2012) will average 4.0%, slightly lower than the 4.1% projected 3 months ago.
Highest Paying Sector: Engineering & Related (5.0%)
Lowest Paying Sector: Electronics Components Trading (1.6%).
European companies will pay the highest increases (4.3 to 4.7%) while Asia Pacific companies the lowest (3.2 to 3.9%).
In terms of size, large companies will pay the highest (4.3 to 4.7%).
This year, 11% of the companies have frozen or plan to freeze wages, and 1% of the companies has cut or plan to cut wages.
For 2013, the wage increases are expected to remain the same as this year at 4.0%.
For 2013, Financial/Insurance sector projected the highest wage increase, which is 4.9% to 5.3%; while Logistics projected the lowest at 2.6%.
3.3 Variable Bonus (excluding AWS)
For this year 2012, the variables bonuses, as reported three months ago, will average:
2.0 months for Managers
1.8 months for Executives
1.6 months for Non-executives.
Highest Paying Sector - Finance/Insurance (2.5 to 3.8 months; higher than the 2.3 to 3.1 months reported 3 months ago)
Lowest Paying Sector - Electronic Components Trading (around 0.7 months; lower than the 1.0 months projected 3 months ago)
Large companies will pay somewhat higher bonuses (2.0 to 2.6 months) than the medium-sized and small companies.
Local companies will pay slightly more than Asia Pacific, European, Japanese and US companies and also slightly more than that reported 3 months ago (2.0 to 2.4 months compared to 1.8 to 2.2 months).
For next year 2013, less companies (75% compared to this years 89%) expect to pay some form of bonus but the bonuses are expected to decrease slightly to an average of:
1.8 months for managers
1.7 months for executives and
1.5 months for non-executives.
The highest paying sector will still be Financial/Insurance which expect to pay an average of 2.8 months. The lowest paying sector, Logistics, expect to pay only less than a month (0.97 month) which is lower than the 1.3 to 2.0 months reported 3 months ago.
In 2012, 86% of companies paid the AWS of one month while for 2013; only 79% of companies expect to do so.
Compared to 3 months ago, fewer companies expect to pay the AWS.
A total of 78% of the companies hired or plan to hire staff in 2012, slightly lower than the 83% 3 months ago
For next year 2013, less companies (56%) plan to hire staff and the number to be hired will also be lower.
The average numbers recruited per company in 2012 and the numbers to be recruited next year are:
Retrenchment, unfortunately, is expected to rise again this year with 12% of companies having retrenched or plan to retrench staff, higher than the 8%, reported 3 months ago.
For 2013, only 27% of companies do not expect to retrench while most of the others are not able to make any projection.
3.7 Staff Turnover
84% of companies experienced staff turnover in 2012, slightly higher than the 81%, reported earlier.
The annual turnover rate for this year will average:
5% for Managers
8% for Executives and
7% for Non-Executives.
For next year, only 40% of companies are likely to experience staff turnover and the turnover rate is also expected to be lower.
3.8 Total Accumulated Monthly Variable Component (MVC) in %
56% of companies currently pay the MVC and the average accumulated amount is 8.5% (Managers), 8.1% (Executives) and 7.8% (Non Executives).
3.9 Entry-Level Salaries
Entry-level salaries for diploma qualification and above increased by 1.1% to 5.6% compared to few months ago;
Those for GCE N, PSC (Secretarial), and Higher Nitec remained unchanged while GCE O, GCE A and Nitec entry-level salaries decreased by 0.1% to 6.7%.
3.10 Importance of HR Function
Almost all the companies (99%) agree that the HR function is as important as the Finance and Marketing functions with only 1% stating that they are not sure.
However, less than half of the respondents think HR salaries are as attractive (see below).
3.11 Attractiveness of HR Salaries
46% of the companies reported that current HR salaries are as attractive as those of Finance and Marketing while 44% of companies do not think so. 10% of companies are not sure.
Interestingly, most respondents in large and medium-sized companies reported their HR salaries are as attractive as Finance and Marketing while most of those in small companies do not think so.
3.12 Chances of advancing to the top HR position in the organisation
Chances of advancing to the top HR position in their respective organisation were rated good as half of respondents rated their chances of doing so are 50% or better.
The chances of advancement depend on size of the organisation; not surprisingly, chances are greater in small and medium-sized than those in large companies.
57% to 59% of respondents in small and medium-sized companies rate their chances as good while only 25% of those in large companies rate their chances as good.
3.13 Average Earnings
After 10 years, the average HR professional can earn $80,000 to $100,000 per annum according to most respondents (77% of companies).
After 15 years, the average earnings are likely to be between $80,000 to $150,000 p a (85% of companies).
After 20 to 25 years, the average earnings are likely to be between $100,000 to $200,000 p a (65% to 76% of companies).
After 30 or more years, the average earnings are likely to be between $100,000 to $250,000 p a (74% to 75% of companies).
3.14 Highest salary paid to current top HR position
The highest salary, not surprisingly, depends on company size.
In small to medium-sized companies the current top HR salary is around $100,000 to $150,000 per annum, while in large companies, it could vary from $100,000 to $300,000 per annum.
3.15 Chances of advancing to Chief HR Officer in Very Large Organisations
The chances of advancing to the highest possible HR position in Singapore i.e. the Chief HR Officer position in very large organisations are rated by most respondents as 30% or less.
Interestingly, those in small and medium-sized companies rated their chances somewhat higher than those in large companies.
3.16 Highest Salary after 20 Years or More
As a reality check, we asked respondents what would be the highest HR salary after 20 years in the profession.
76% responded that the highest HR salary after 20 years would be between $100k to $250,000 p a.
Interestingly, the response here is almost irrespective of company size.
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