HCS/RDS 2016/2017
Survey on Business Prospects/Wage Increase/Bonus & Manpower-Lean Issues.
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1.0
Introduction HCS and RDS surveyed 89
companies in July 2016 to find out about their business
prospects, wage, bonus and recruitment plans. Companies
were also asked for their views on manpower-lean issues. 2.0
Summary of
Key Findings 2.1 Not surprisingly, companies are
slightly less optimistic than last year but not very much so, and, as
expected, they are still somewhat careful on wage increases, bonuses and
recruitment. 2.2 This
year’s basic wage increase averaged 3.2% slightly lower than the 3.5% to
4.0 % last year; - for 2017, it
is expected to be slightly higher at 3.4%. 2.3 This
year’s variable bonuses (excluding AWS) will average 1.5 to 1.8 months; - for next year, they are also likely to
be marginally lower at 1.4 to 1.6 months 2.4 The total
wage increase for 2016 is 3.6%, and with the Consumer Price Index at minus
0.4%; the real wage increase is 4.0%; - for next year, the total wage increase
is expected to be 2.2%, and with CPI expected to be around 1.0%, real wages
are expected to increase by 1.2%. 2.5 This year,
a total of 75% of companies hired staff, slightly less than the 78% in 2015; - for next year, although less (58%)
companies plan to hire staff the average number of executives and
non-executives to be hired are slightly higher than this year’s 2.6 More
companies retrenched this year, 12% of the companies compared to 8% in 2015 - for next
year, none of the companies, plan to retrench. 2.7 This year,
87% of companies experienced staff turnover; although this is slightly more
than the 86% last year, the average turnover rates are slightly lower than
last year’s. - for next year fewer companies (57%)
are likely to experience staff turnover and the turnover rates are also
expected to be slightly lower 2.8 Entry-level
salaries were quite mixed; those for MBA decreased by $200 while those for
GCE, NITEC, Dip(Eng) and
Degree(Eng) went up by $80 to $100 and the rest
were either unchanged or went up slightly. 2.9 On the
issue of manpower-lean policies, 51% of companies are already implementing
them with 28% still considering and 16% not sure. - as for the essential steps to take for
implementation, most cite: continuous
review of processes and technology and opening up of communications and
making processes more transparent - sure enough, there are many anxieties
and problems involved ranging from perception gaps to job security fears,
distrust and lack of knowhow; interestingly, “HR-not-up-to-task” was not
cited. 3.0 Key
Findings 3.1 Business
Prospects Current: 72% of companies reported satisfactory or better business
prospects compared to 76% last year -
the
most satisfied sectors are F&B/Hotels and Construction & Related More companies reported unsatisfactory business
prospects 28% compared to 24% last year. -
the least
satisfied sector is still Consumer Products/Retail, similar to last year.
European companies were the most satisfied (90%
satisfied or better) followed by Japanese (85%), US companies (70%) and Local
companies (66%)，Asia Pacific companies were the least
satisfied (55%). Large companies fared better than the rest (83%
satisfied or better compared to 65% of small and 71% of medium-sized
companies). Next 6 months: 12% of companies expect prospects to improve, 67% expect no change
while 20% expect prospects to worsen -
F&B/Hotels and IT/HiTech are the
most optimistic, -
Electronics & Related sector is the least optimistic.
Asia Pacific companies are most optimistic over
next 6 months, while Japan companies are the least optimistic. In terms of size, large and small companies are
relatively more optimistic, compared with the medium-sized companies 3.2 Basic
Wage Increase More companies granted
wage increases 97% compared to 91% last year; the wage increases, however are
slightly lower at 3.2% compared
to the 3.5 to 4.0% in 2015. Highest Paying Sector : Engineering & Related (3.6 to 4.5%) Lowest Paying Sector : Logistics
(1.9 to 2.3%). In 2016, 1% of the companies cut wages; more companies froze wages, 13% of companies compared to 9% in 2015. For next year, the wage
increase will average 3.4% with 4% of companies planning to freeze wages; and 1%
of companies planning to cut wages.
For 2017, the sector expecting the highest wage increase
is Engineering & Related (3.9% to 4.1%). And Financial &
Related sector expects to have the lowest wage increase, 2.5 to 3.2%. In terms of both company
size and nationality, wage increases are relatively similar and do not vary
very significantly. 3.3 Variable
Bonus (excluding AWS) For 2016, 85% of companies (92% in 2015) paid variable
bonuses which are marginally lower than last year’s, averaging: 1.8 months for Managers 1.7 months for Executives 1.5 months for Non-executives. Highest
Paying Sector – General Manufacturing (2.2 to 3.2 months) Lowest
Paying Sector – Logistics
(0.6 months) Large companies paid
higher bonuses (1.9 to 2.4 months) than the 1.2 to 1.8 months of the small
and medium-sized companies. For next year 2017, 82% of companies expect to pay some form of bonus and the bonuses are
expected to be slightly lower averaging: 1.6 months for managers 1.6 months for executives
and 1.4 months for non-executives.
The
highest bonus paying sector next year will continue to be General
Manufacturing sector which expect to pay bonuses at 2.0 to 2.9 months while
the lowest paying sector, will continue to be Logistics sector at 0.3 months. In 2016, 91% of companies
will pay 0.9 to 1
month of AWS
while for next year 90% of companies expect to
pay the AWS of 1 month.
3.5 Total/Real Wage Increase Total wage increase is
total wage (annual base plus AWS and variable bonus) of current year divided
by that of the previous year. With 91% of companies
paying AWS, total wage increase for 2016 is 3.6% and with the Consumer Price
Index at minus 0.4% (as at June 2016), the real wage increase is 4.0% For next year, as 90% of
companies expecting to pay AWS, total wage increase for 2017 is expected to
be 2.2%. The real wages are expected to be increase by 1.2%, after factoring
in the CPI projection of 1.0%
3.6 Recruitment In 2016, a total of 75% of companies hired staff, slightly
less than the 78% in 2015. For next year, 58% of companies plan to hire staff. The average number recruited
per company in 2016 and the number to be
recruited next year are:
More companies froze or
plan to freeze recruitment 45% this year (compared to 27% in 2015); for next year, 34% of the companies expect to freeze
recruitment. 3.7 Retrenchment More companies retrenched
this year, 12% of companies compared
to 8% in 2015. For next year, none of the companies, so far, plan to retrench. 3.8 Staff Turnover This year, 87% of companies experienced staff turnover;
although this is slightly more than the 86% last year, the average turnovers
rates are slightly lower than last year’s.
The annual turnover rate
for 2016 will average: 4% for Managers 8% for Executives and 7% for
Non-Executives. For next year fewer
companies (57%) are likely to experience staff turnover and the turnover rate
is also expected to be slightly lower. 3.9 Total
Accumulated Monthly Variable Component (MVC) in % of Monthly Salary Slightly more companies,
60% compared to 56% in 2015, paid the MVC. The average accumulated amount is
less than the 10.0 to 10.5% in 2015. In 2016 the MVC averaged: 8.1% for Manager 8.1% for Executives 8.3% for Non Executives.
3.10
Entry-Level Salaries
Entry-level
salaries for PSC(Secretary) and Higher Nitec decreased by $25 to $30; while those for MBA
decreased by $200. GCE ‘N’, GCE
‘O’, Nitec, Diploma(Engineering)
and Degree(Eng) saw increases of $80 to $100;
Degree(Others) went up by $25 while those for GCE ‘A’, ISC(ITE Skills
Certificate) were unchanged. 3.11 Manpower-Lean Policies 3.11.1
51% of companies are
already implementing manpower-lean policies with 28% still considering and
16% not sure. 3.11.2
Understandably, companies
and their employees have anxieties or are having problems with the issue: almost half (48%) cite
perception gaps among employees and management and another 48% cite job
security fears 17% cite distrust between
employees and management 15% say they lack
implementation knowhow 14% cite possible
internal divisiveness 14% cite management inertia 12% cite potential for
downsizing abuse. Interestingly, no Company
mentioned that HR is not up to the task. 3.11.3
The steps that are
considered essential for successful implementation and the proportion of
companies citing them are:
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