1.0 Introduction
SHRI in conjunction with RDS surveyed 203 companies in Dec 2006 to find out about their wage increase, bonus and recruitment plans and also to what extent companies are looking into supplementary saving/retiring schemes.
2.0 Summary of Key Findings
2.1 With this year’s strong economic growth, some companies were almost euphoric but business optimism appeared to be levelling off. And, as next year’s growth is expected to be somewhat lower, a sense of caution has crept into their wage, bonus and recruitment plans.
2.2 Slightly less companies (98% of companies compared to 100% six months ago) were positive about business prospects over the next six months.
2.3 Wage increases this year averaged 3.6% higher than 2005’s 3.2% and for next year, they are expected to go up to only 3.8%.
2.4 Variable bonuses (excluding AWS) this year will average 1.9 months, higher than last year’s 1.8 months; for next year, they are expected to remain the same at 1.9 months.
2.5 On recruitment, more companies hired this year, 88% compared to 82% last year and the number hired per company was slightly higher than last year’s; for next year not only will less companies (84%) be hiring but the numbers to be hired will also be lower.
2.6 Entry-level salaries for school-leavers remained unchanged except for GCE ‘O’, PSC (Secretary), Nitec and Degree-holders which increased by 0.5%, 7.7%, 4.5% and 9.2% respectively.
2.7 On supplementary saving/retiring schemes, only 12% agreed that there is a need for such a scheme; 5% have already one in place and another 4% are looking into developing one.
2.8 59% and 22% of companies provided data on their per diem rates and overseas allowances respectively –details of these will be sent out soon in a supplementary report.
3.0 Key Findings
3.1 Business Prospects
Current: 93% of companies reported satisfactory or better prospects (similar to Dec 2005)
- most satisfied sector was Aviation & Related;
- least satisfied sector was Education.
Next 6 months: 98% were optimistic (37% expected further improvements, 62% expected no change)
- most optimistic sectors was Recreation/Travel;
- least optimistic sector was Electronics Manufacturing.
Out of a total of 22 sectors, 9 reported unsatisfactory business conditions; the 9 sectors are:
Chemicals and Related
Consumer Products/Retail
Education
Electronics Manufacturing
General Manufacturing
Healthcare/Pharmaceuticals
IT/Hi Tech
Marine/Shipping
Services
US companies did very well (100% satisfied or better) and were also the most optimistic (45% expected further improvement) over the next six months.
In terms of size, large companies fared well (98% satisfied or better) compared to 92% of medium companies and 91% of small companies. Medium companies, however, were the most optimistic over the next six months.
3.2 Basic Wage Increase
Overall, wages increased by 3.6% for the whole of this year.
97% of companies increased wages this year and 3% froze wages (4% froze wages last year).
Highest Paying Sector : Healthcare/Pharmaceuticals (4.7 to 5.3%)
Lowest Paying Sector : Logistics (2.7 to 3.0%)
US companies paid the highest increase (3.9 to 4.0%) while Japanese and Asia Pacific companies, the lowest (3.2 to 3.7%)
The basic wage increases projected for 2007 are 3.8% for managers and 3.9% for executives and non-executives.
Highest Paying Sector s: Financial/Insurance (4.7%)
Lowest Paying Sector : Food & Beverage/Hotels (3.0 to 3.3%)
US companies will pay the highest increase (4.2 to 4.3%) and the Japanese companies, the lowest (3.4 to 3.6 %)
Only 1% of companies plan to freeze wages in 2007 and one company plan to cut wages.
3.3 Variable Bonus (excluding AWS)
For 2006, the variables bonuses averaged:
2.1 months for Managers
1.9 months for Executives
1.8 months for Non-executives
Highest Paying Sector - Aviation (3.3 to 3.6 months)
Lowest Paying Sector - Recreation/Travel (1.4 month)
Large Companies paid the highest (2.0 to 2.5 months) while small companies paid the lowest (1.7 to 1.9 months)
Japanese companies paid the highest (2.0 to 2.3 months) while Asia Pacific companies paid the lowest (1.5 to 2.1 months)
For next year, bonuses are expected to remain the same at:
2.1 months for Managers
1.9 months for Executives
1.8 months for Non-executives
Highest Paying Sector - Aviation (3.6 to 3.8 months)
Lowest Paying Sector - Recreation/Travel (1.3 to 1.6 months)
Large companies will pay the highest (1.9 to 2.3 months) while small companies expected to pay the lowest. (1.8 to 1.9 months)
Once again, Japanese companies expected to pay the highest (2.1 to 2.3 months) while Asia Pacific companies expected to pay the lowest (1.3 to 1.6 months).
3.4 AWS
Most companies (95%) paid an AWS averaging 1 month of basic salary.
3.5 Recruitment
A total of 88% of the companies hired new staff this year. Next year, not only will there be fewer companies hiring (84%) but the number of people to be hired will also be lower.
The numbers recruited per company this year and for next year are:
|
2006 |
2007 |
||||
|
Mgrs |
Execs |
Non-Execs |
Mgrs |
Execs |
Non-Execs |
|
5 |
23 |
35 |
5 |
16 |
33 |
3.6 Retrenchment
9% of companies retrenched staff this year and this is expected to drop to 4% in 2007
The average number of people per company retrenched this year and the number expected to be retrenched next year are:
|
2006 |
2007 |
||||
|
Mgrs |
Execs |
Non-Execs |
Mgrs |
Execs |
Non-Execs |
|
2 |
9 |
43 |
1 |
5 |
44 |
3.7 Entry-Level Salaries
Entry-level salaries remain unchanged except for GCE ‘O’, PSC (Secretary), Nitec and Degree-holders which increased by 0.5%, 7.7%, 4.5% and 9.2% respectively.
3.8 Supplementary Saving/Retiring Schemes
3.8.1 Out of the 178 companies which responded, 12% agreed that there is a need for such a scheme.
3.8.2 Only 5% have such a scheme.
3.8.3 5% have a stock purchase/saving plan, 15% a stock option and 4% have a performance share plan/phantom share or restricted shares plan.
3.8.4 Another 4% are looking into developing a plan and key features are affordability and ease of administration.