SHRI/RDS 2011/2012 Survey on Business Prospects/Wage Increase/Bonus, Recruitment & Fair Employment Practices.
RDS surveyed 151 companies in Oct 2011 to find out about their business prospects, wage increase, bonus, recruitment plans and also their views on Fair Employment Practices.
2.0 Summary of Key Findings
2.1 The second half of this year has gotten worse for most companies, as expected, but only slightly so.
Despite the projection for next year that “economic growth is expected to slow or even stall”, most companies are, surprisingly, quite optimistic. However, they remain somewhat cautious about next year’s wage increases, bonuses and recruitment.
2.2 The basic wage increase in 2011 averaged 4.1% for the full year, higher than the 3.6% in 2010. For next year 2012, the basic wage increase is expected to drop to 3.6%.
2.3 Variable bonuses (excluding AWS) averaged 2.2 months, slightly lower than the 2.3 months in 2010. For 2012, they are expected to drop slightly to 1.8 to 2.1 months.
2.4 The drop in both wage increase and bonus this year means a total wage increase of only 3.4% and with the consumer price index expected to increase by 4% to 5%, there will be a drop in real wages of around 0.6 to 1.6%.
For 2012, the total wage increase is expected to be only 1.3% and with inflation expected to be around 2.5% to 3.5%, real wages are likely to drop further by 1.2% to 2.3%.
2.5 On recruitment, 77% of companies hired staff in 2011 (similar to that in 2010), and for the first half of 2012, only 54% are expected to hire.
2.6 The retrenchment issue is, however, more encouraging as only 3% of the companies this year retrenched staff, less than the 8% in 2010 and for 2012, the proportion of companies expecting to retrench will drop further to 1%.
2.7 Staff turnover declined this year and is expected to continue to drop in 2012 from 5% to 8% to 3% to 6% next year.
2.8 Most entry-level salaries decreased by 1.4% to 8.5% compared to six months ago; the exception was that for university degree holders which increased by 2.0%.
2.9 On the issue of Fair Employment Practices, many companies probably can not do without foreign workers; 25% of them employ them only as a last resort and 21% are prepared to comply with a foreign workforce quota;
- soft skills, willingness to assimilate/upskill and preparedness to stay for longer term career development are what employers seek in candidates and
- in order to develop Singaporeans, most employers need to enhance their managers’coaching skills, provide for multiskilling, improve work-life balance and employ mature workers.
3.0 Key Findings
3.1 Business Prospects
Current: 86% of companies reported satisfactory or better prospects, slightly lower than the 91% six months ago;
- the most satisfied sector is the Engineering & Related sector.
14% of companies reported unsatisfactory business prospects, compared to 9% six months ago with the least satisfied sector being marine/shipping.
Next 6 months: 11% of companies expect prospects to improve, 72% expect no change while 17% expect prospects to worsen.
- most sectors (compared to 2 sectors six months ago) expect business prospects to worsen somewhat.
- the Food & Beverage sector is the most optimistic while the the Printing and Service sectors are the most pessimistic.
Asia Pacific companies are doing relatively well with 89% satisfied or better. European and US companies, on the other hand, are doing slightly less well.
Over the next 6 months, Asia Pacific companies are also the most optimistic while European companies are the least optimistic.
Large companies fared better than the rest (91% satisfied or better) compared to 88% of small and 81% of medium-sized companies. The large companies are also the most optimistic.
3.2 Basic Wage Increase
The wage increase this year (2011) averaged 4.1%, higher than last year’s 3.6%.
This year only 3% of the companies have frozen wages and none has cut wages.
For 2012, the wage increases are expected to average around 3.6%.
3.3 Variable Bonus (excluding AWS)
For this year 2011, the variables bonuses will average:
In 2011, 89% of companies paid the AWS of one month while for 2012, only 76% of companies expect to do so.
A total of 77% of the companies hired staff in 2011. For next year 2012, less companies (54%) plan to hire staff and the number to be hired will also be lower.
The average number recruited per company in 2011 and the number to be recruited next year are:
3% of the companies retrenched staff in 2011; for next year only 1% expect to retrench.
3.7 Staff Turnover
88% of companies experienced staff turnover in 2011, slightly higher than the 85% in 2010.
The annual turnover rate for this year will average:
For next year, only 50% of companies are likely to have staff turnover and the turnover rate is also expected to be significantly lower.
3.8 Total Accumulated Monthly Variable Component (MVC) in %
53% of companies currently pay the MVC and the average accumulated amount is 9.3% (Managers), 9.1% (Executives) and 9.7% (Non Executives).
3.9 Entry-Level Salaries
Most entry-level salaries decreased by 1.4% to 8.5% compared to six months ago; the exception was that for Degree holders which increased by about 2.0%.
3.10 Fair Employment Practices
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