SHRI/RDS 2011/2012 Survey on Business Prospects/Wage Increase/Bonus, Recruitment & Fair Employment Practices.

1.0              Introduction

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%.

Highest Paying Sector   :           Engineering & Related (4.5 to 5.5%).
Lowest Paying Sector   :           Education (3.3%).

Asia Pacific companies paid the highest increases (4.4%) while Europe companies paid the lowest (3.9%).

In terms of size, large companies paid the highest (4.2%), and expect wage increase 3.8% over the next six months.

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%.


For 2012, the highest wage increase sector is Financial/Insurance which expect to pay 5.0% to 5.4 % while the lowest wage increase sector is the Electronics Manufacturing sector with only 1.9%.


3.3    Variable Bonus (excluding AWS)

For this year 2011, the variables bonuses will average:

2.5 months for Managers
2.2 months for Executives
2.0 months for Non-executives

Highest Paying Sector   : Engineering & Related (2.8 to 3.1 months)
Lowest Paying Sector   : Electronics Manufacturing (0.9 to 1.2 months)

Large companies paid somewhat higher bonuses (2.5 to 3.3 months) than the medium-sized and small companies. 

US companies, on the other hand, paid slightly more (2.3 to 3.3 months) than Asia Pacific, European, Japanese and Local companies.

2011, 87% of companies paid bonuses compared to 81% in 2010.

For next year 2012, with only 78% of companies expecting to pay some form of bonus, the bonuses are expected to decrease quite significantly to an average of:

2.1 months for Managers
1.9 months for Executives
1.8 months for Non-executives



The highest paying sector will be Construction which expect to pay 2.8 months while the lowest paying sector is expected to be Electronics Manufacturing with only 0.1 month.


3.4       AWS

In 2011, 89% of companies paid the AWS of one month while for 2012, only 76% of companies expect to do so.


3.5       Recruitment

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: 


1st Half of 2012














3.6       Retrenchment 

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:

5% for Managers
8% for Executives
8% for Non-executives

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

i)      Only 25% would employ foreigners as a last resort while 21% prefer having a foreign workforce quota;

The qualities that employers look for in candidates and the proportion of companies citing them are:

open mindedness & positive attitude to learning/collaboration         87%
intrinsic motivation & passion for the job                                    74%
likelihood to stay for the longer term                                          66%

ease of assimilation (soft skills & cultural fit)                                64%
willingness to upskill/train others/impart knowledge/skills               61%
potential for future upgrading/promotion                                    48%
experience in same industry                                                        2%

ii)         In order to consider Singaporeans for job positions, employers should:

recruit for right attitude; provide technical training                         81%
recruit right person (i.e. fits the job, will stay/has potential to grow) 77%
provide longer term career development                                        77%

enhance corporate learning/productivity/job re-design                     58%
invest in leadership development                                                   41%
source more widely for local recruitment                                        33%
support/contribute to industry skills training                                   31%
set up apprentice/training schemes                                               24%
conduct manpower & skills profiling                                               22%
pay higher wages, better benefits                                                 19%
redeploy/outplace non-performers                                                15%
improve work life balance                                                             2%

iii)         The efforts that employers should make to develop Singaporeans are:

enhance coaching/mentoring by supervisors/managers                   75%
multi-skilling to enhance employee career prospects                       72%
enhance work-life balance/environment                                       69%

development/training to suit individual strengths/weaknesses          68%
enhance individual employee resilience/adaptability                        65%
re-employ mature workers                                                         52%
educate/develop Singaporeans to work with foreigners                   26%
build social cohesiveness & sense of ownership                                2%




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