SHRI/RDS Survey 2008 on Pay & HR Actions.

1.0              Introduction

SHRI in conjunction with RDS surveyed 193 companies in January 2008 to find out about their wage increase, bonus and recruitment plans as well as their special measures to attract and retain staff.


2.0              Summary of Key Findings

2.1     Despite concerns of the unfolding US credit crunch, many companies are still optimistic about future business prospects. However, some companies are particularly anxious about its spill-over effects and have started moderating wage, bonus as well as recruitment expectations.

2.2     Slightly more companies (98% of companies compared to 95% six months ago) are satisfied with current business prospects and almost all (98%) are optimistic over the next six months.

2.3     Wage increases this year will average around 5% higher than 2007s 4.5%.

2.4     Variable bonuses (excluding AWS) this year will average 2.1 to 2.6 months, similar to last year.

2.5     On recruitment, fewer companies will be hiring this year (73% compared to 81% last year) and the number to be   hired per company will also be lower.

2.6     87% of companies experienced staff turnover in 2007 and the turnover is expected to decrease this year.

2.7     Entry-level salaries for most qualifications increased in January 2008 by 3% to 6% from six months ago.

2.8     Practically all companies are resorting to special measures to attract and retain staff and the more popular ones are:

                                                                                    Proportion of
                                                                           companies using

   selective market adjustments                                   53%

            opportunities for continuous learning                         53%

            higher variable bonuses                                            49%

            improving work-life balance                                      49%

            higher wage increases                                               48%

            schemes to improve staff engagement                        31%

            faster promotion                                                       30%

  coaching/counselling training                                      26%

  market premiums/allowances                                      25%

  fast-track career development                                    25%.



3.0       Key Findings

3.1       Business Prospects

Current:                        97% of companies reported satisfactory or better prospects (higher than December 2007s 95%)

-  most satisfied sector was Construction & Related;

-  least satisfied sector was Electronic Components Trading.

Next 6 months:             98% were optimistic (28% expected further improvements, 70% expected no change)

-          most optimistic sector was Marine & Shipping;

-          least optimistic sector was Property.

Out of a total of 18 sectors, 4 reported* unsatisfactory business conditions; the 4 sectors are:

Electronic Components Trading

Electronics Manufacturing

Healthcare/ Pharmaceuticals

* 10% or more of the companies in these 4 sectors

Local companies did very well (100% satisfied or better) while Asia Pacific companies were the most optimistic (47% expected further improvement) over the next six months.

In terms of size, large companies fared very well (100% satisfied or better) compared to 98% of medium companies and 93% of small companies. The large & medium companies are the most optimistic (29% expect further improvements) over the next six months.


3.2       Basic Wage Increase

  Overall, wages will increase this year by 5.0%, higher than the 4.5% of last year.

  Fewer companies are freezing wages this year;
  (5% compared to 9% last year).

  95% of companies increased wages this year, higher than the 91% last year.

Highest Paying Sector   : Government & Related (4.9% to 6.3%)

Lowest Paying Sector   : Electronics Manufacturing (4.0% to 4.2%)

            Local companies paid the highest increases (4.9% to 5.4%) while Japanese companies, the lowest (4.1% to 4.3%).

  The basic wage increases for 2007 were 4.5% for managers, 4.6% for executives and 4.3% for non-executives.

5% of companies plan to freeze wages in 2008 and none of the companies plan to cut wages.


3.3       Variable Bonus (excluding AWS)

For 2007, the variables bonuses averaged:

                        2.6 months for Managers

                        2.2 months for Executives

                        2.1 months for Non-executives

             Highest Paying Sector   - Financial/ Insurance (2.5 to 5.6 months)

             Lowest Paying Sector   - Electronic Components Trading (0.5 month)

              Large companies paid the highest (2.3 to 3.0 months) while small companies paid the lowest (1.7 to 2.0 months).

             Asia Pacific companies paid the highest (2.5 to 3.1 months) while US companies paid the lowest (1.6 to 2.0 month).

For this year, bonuses are expected to be very similar:

                        2.6 months for Managers

                        2.3 months for Executives        

                        2.1 months for Non-executives


             Highest Paying Sector   - Financial/ Insurance (3.2 to 6.2 months)

             Lowest Paying Sector   - Electronics Manufacturing (1.3 months)


             Large companies will pay the highest (2.4 to 2.9 months) while

             Small companies expected to pay the lowest (1.8 to 2.1 months).


             Asia Pacific companies expect to pay the highest (2.8 to 3.0 months) while

             US companies expect to pay the lowest (1.7 to 2.1 months).



3.4       AWS

Most companies (86%) paid an AWS averaging 1 month of basic salary.



3.5       Recruitment

A total of 73% of the companies hired or plan to hire staff this year (compared to 81% last year). The number to be hired is expected to lower than last year.

The numbers recruited per company last year and for this year are:

















3.6       Retrenchment

9% of companies retrenched staff last year and this number is expected to drop to 2% in 2008.

The average number of people per company retrenched last year and the number expected to be retrenched this year are:

















3.7       Staff Turnover

Most companies (87%) in 2007 experienced staff turnover. Across all sectors, the average staff turnover for 2007 was:

             10% for Managers

             12% for Executives and

             13% for Non-executives. 

For this year, the turnover is expected to decrease somewhat to

             8% for Managers and

             10% for both Executives and Non-executives.


3.8       Entry-Level Salaries

Entry-level salaries for Nitec, Higher Nitec & Degree (Engineering) remain unchanged. For GCE N, O and A levels, PSC (Secretary), Diploma, Degree (Others) holders and MBA, they increased by 3% to 6%.


3.9       Special Measures to Attract & Retain Staff

             The special measures and the % of companies using them are:

                          Selective market adjustments                            53
                          Continuous learning                                          53
                          Higher variable bonuses                                    49
                          Improving work-life balance                              49
                          Higher wage increases                                       48
                          Schemes to improve staff engagement                31
                          Faster promotion                                              30
                          Coaching/counseling training                              26
                          Market premium/allowance                               25
                          Fast-track career development                          25
                          Employing more foreign staff                              23
                          Use of mentors/buddies                                     21
                          Special & flexi-benefits                                      17
                          Executive coaching for senior management         15
                          Employing more contract staff                            15
                          Across-the-board market adjustments               14
                          Share-based incentives                                      13
                          Retention/deferred bonuses                                11
                          Sign-on bonuses                                                10
                          Loyalty rewards/bonuses                                     9
                          Employing more older workers                            9
                          Additional HR resources                                     5
                          Upgrading of HR                                                4
                          Special saving schemes                                       4
                          Sabbatical/unpaid leave                                       4 

Interestingly, although there is some anecdotal evidence that HR departments are under pressure to provide better support to manage their human capital, only a few companies are looking to expand or upgrade their HR departments. 


If you wish to participate in any of our future surveys, click here