SHRI/RDS Survey on 2006 Wage Increase, Bonus, Recruitment Plans & Employment of Older Workers.
1.0 |
Introduction
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SHRI in conjunction with RDS surveyed 242 companies in May 2006 to find out about their wage increase, bonus and recruitment plans and also to what extent companies are supporting the Tripartite Committee’s recommendations on the Employment of Older Workers. |
2.0 |
Summary of Key Findings
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2.1 |
Business sentiment in June 2006 reached a record high.
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2.2 | All companies were positive about business prospects over the next six months | |
2.3 |
Despite
the widespread optimism, however, some
companies continue to restrain their wage increase, bonus and recruitment
plans because of lingering global and business uncertainties.
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2.4 |
Wage
increases this year averaged 3.7% higher than 2005’s 3.2%.
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2.5 |
Variable bonuses (excluding AWS)
this year will average 1.9 months, higher than last year’s 1.8 months.
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2.6 |
On recruitment, more companies
hired this year, 93% compared to 82% last year but the number to be hired
per company is lower than last year’s.
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2.7 |
Entry-level salaries for
school-leavers such as GCE ‘O’ and MBA holders, have started to move up
while those for PSC (Secretary), Higher Nitec, and Degree holders have come
down slightly.
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2.8 |
Most companies support the
Tripartite Committee’s recommendations on the employment of older workers
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- | 86% of companies agree to the expansion of the Job Re-creation programme to more sectors | |
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91% would like to accelerate wage restructuring to move to a more job-worth/performance system | |
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86% support the updating of the Code of Responsible Employment Practices to shape the perception towards older workers. | |
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86% support the updating of the Code of Responsible Employment Practices to shape the perception towards older workers. | |
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95% would like the government to increase assistance for skills upgrading of older workers |
3.0 Key Findings 3.1 Business Prospects Current: 95% of companies reported satisfactory or better prospects (higher than the 93% in May 2005) - most satisfied sector was Aviation & Related; - least satisfied sector was Printing & Related. Next 6 months: 43% expected further improvements, 57% expected no change. - most optimistic sectors was IT/Hi Tech; - least optimistic sector was Transportation. Out of a total of 21 sectors, only 7 reported unsatisfactory business conditions but even these 7 sectors were optimistic over the next six months; the 7 sectors are: Chemicals and Related Construction & Related Consumer Products/Retail Electronics & Related General Manufacturing Healthcare/Pharmaceuticals Printing & Related US companies did very well (100% satisfied or better) and were also the most optimistic (53% expected further improvements) over the next six months. In terms of size, medium companies fared well (97% satisfied or better) compared to 96% of large companies and 93% of small companies. Small companies, however, were the most optimistic over the next six months.
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3.2 Basic Wage Increase Overall, wage increases are expected to average 3.7% for the whole of this year, higher than last year’s 3.2%. 98% of companies have increased or plan to increase wages this year. Highest Paying Sector : Healthcare/Pharmaceuticals (4.2 to 5.1%) Lowest Paying Sector : Recreation/Leisure (2.3 to 2.9%) Asia Pacific companies expect to have the highest average increase (4.3 to 4.5%) and Japanese companies, the lowest (2.9 to 3.2%). Only 2% of companies froze or plan to freeze wages (4% froze wages last year) and these were companies from four sectors namely: Chemicals & Related Construction & Related Education Electronics & Related
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3.3 Variable Bonus (excluding AWS) 97% of companies paid or expect to pay some form of variable bonuses this year. For 2005, the variables bonuses averaged: 1.9 months for Managers 1.8 months for Executives 1.7 months for Non-executives Fo For 2006, they will average: 2.0 months for Managers 1.9 months for Executives 1.7 months for Non-executives Highest Paying Sector - Aviation & Related (3.4 to 3.7 months) Lowest Paying Sector - Education and Recreation/Leisure (1.2 months) Small companies expect to pay the highest (1.9 to 2.3 months) while medium-sized companies expect to pay the lowest (1.6 to 1.8 months). Asia Pacific companies expect to pay the highest (2.5 to 3.0 months) while and US companies expect to pay the lowest (1.5 to 1.8 months).
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3.4 AWs Most companies (94%) paid an AWS averaging 1 month of basic salary. |
3.5 Recruitment A total of 93% of the companies hired or plan to hire new staff this year. Although this is higher than the 82% last year, the number to be hired will be lower.
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3.6 Retrenchment 9% of companies plan to retrench staff this year – down from 11% in Dec 2005. The average number of people per company expected to be retrenched this year and the number retrenched last year were:
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3.7 Entry-Level Salaries Entry-level salaries for PSC (Secretary), Higher Nitec and Degree-holders dropped about 7%, 2% and 2% respectively. Those for GCE ’O’ and MBA holders increased about 4%.
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3.8 Support For Tripartite Committee’s Recommendations on Employment of Older Workers
3.8.1 Expand Employment Opportunities of Older Workers Out of the four recommendation made by the Tripartite Committee to expand employment opportunities of older workers, the most popular was the expansion of the Job Re-creation programme to more sectors. % of companies agree Expand Job Re-creation Programme to more sectors 86% Scheme to encourage SMEs to hire experienced PMEs 70% ADVANTAGE! Scheme 63% Legislation to re-employ Workers beyond age of 62 yrs 53%
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3.8.2 Enhance Cost Competitiveness of Older Workers Out of the four recommendation made by the Tripartite Committee to enhance cost competitiveness of older workers, the most popular was the wage restructuring towards a more job-worth/performance system. % of companies Accelerate wage restructuring to move to a more job-worth/performance system 91% Introduce new Tripartite guidelines for re-employing workers beyond age 62 67% Convert to more portable medical benefits system 60% Adapt Japanese model of competency-based wage system 48%
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3.8.3 Raise Skills & Value of Older Workers Out of the three recommendation made by the Tripartite Committee, the most popular was for government to increase assistance for skills upgrading of older workers. % of companies using Govt to increase assistance for skills upgrading of older workers 95% Expand Workforce Skills Qualification System & Employability Skills System 86% Expand “Place & Train” & “Strategic Manpower Conversion” programmes 76%
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3.8.4 Shape Positive Perceptions Towards Older Workers Out of the three recommendation made by the Tripartite Committee to shape positive perceptions towards older workers, the most popular was to update the Code of Responsible Employment Practices. % of companies Update the Code of Responsible Employment Practices 86% Set up Tripartite Alliance for Fair Employment Practices 81% Refine Tripartite Guidelines on Non-Discriminatory Job Advertisements 81% |