SHRI/RDS Survey 2008 on Pay & HR Actions.
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 2007’s 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:
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 2007’s 95%)
- most satisfied sector was Construction & Related;
- least satisfied sector was Electronic Components
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
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;
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).
Most companies (86%) paid an AWS averaging 1 month of basic salary.
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:
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
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.
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