SHRI/RDS Survey 2008/09 on Pay & HR Actions.
SHRI in conjunction with RDS surveyed 218 companies in August 2008 to find out about their wage increase, bonus and recruitment plans as well as their employee-relief and cost-management measures in the face of rising inflation and business uncertainties.
2.0 Summary of Key Findings
2.1 Many companies have, since late 2007, started to brace themselves for the spill-over effects from the US credit crunch. To date, surprisingly, they do not appear to have felt the full effect of the crisis. Business optimism has dipped somewhat but it is still relatively high. Wage increases are slightly higher than expected but bonuses and recruitment expectations are slightly lower from six months ago.
2.2 Slightly less companies (91% of companies compared to 97% six months ago) are satisfied with current business prospects and 88% (compared to 98%) are optimistic over the next six months.
2.3 Wage increases this year will average around 5.3% higher than 2007’s 4.5%. For next year, the wage increase is expected to decline somewhat to 5% which is still surprisingly high considering the widely expected economic slowdown.
2.4 Variable bonuses (excluding AWS) this year will average 2.1 to 2.5 months, similar to last year’s.
2.5 On recruitment, more companies will be hiring this year (85% compared to 81% last year) and although the number to be hired per company will be lower than last year’s, it is higher than that forecasted six months ago.
2.6 Slightly less companies experienced staff turnover (84% compared to 87% last year) and the turnover per company is also slightly lower than last year’s.
2.7 11% of companies retrenched or plan to retrench this year. Although this is only slightly higher than the 9% last year, this is significantly higher than the 2% forecasted six months ago.
2.8 Entry-level salaries for some qualifications remained unchanged while others increased by 2% to 5.7% from six months ago.
2.9 45% of companies have paid or are planning to pay the “once-off Inflation Bonus” to their employees; one third of whom paid or will pay $100 to $300 and another one third either in higher bonuses or higher wage increases.
2.10 To better manage costs in the face of rising inflation, companies are reviewing their ERP and petrol reimbursement rates and air travel entitlements.
2.11 19% of companies are using outsourcing services and they are mainly for payroll processing (71%) and benefits administration (21%).
3.0 Key Findings
3.1 Business Prospects
Chemicals & Related Electronic
* 10% or more of the companies in these 7 sectors
In terms of size, large companies fared very well (92% satisfied or better) compared to 91% of medium-sized companies and 90% of small companies. The small companies are the most optimistic (23% expect further improvements) over the next six months.
3.2 Basic Wage Increase
Overall, wages will increase this year by 5.3%, higher than 2007’s 4.5% and the 5.0% forecasted earlier this year.
More companies increased wages this year, 95% compared
to last year’s 91%
Asia Pacific companies paid the highest increases (5.3%
The wage increases projected for 2009 are
Less companies are freezing wages this
year, 6% compared to 9% last year.
3.3 Variable Bonus (excluding AWS)
Paying Sector - Food & Beverage/Hotels (2.5 to 4.1 months)
companies paid the highest (2.3 to 3.2 months) while
year 2009, bonuses are expected to be slightly lower:
Pacific companies expect to pay the highest (2.4 to 2.7 months) while
Most companies (83%) paid an AWS averaging 1.0 month of basic salary.
85% of the companies hired or plan to hire staff this year (compared to 81% last year). The number to be hired is lower than last year’s but higher than the number forecasted six months ago.
The numbers recruited per company this year and for next year are:
40% of companies provided recruitment figures for next year and what is interesting is that the number to be hired next year is expected to be even higher than the number this year.
11% of companies retrenched or plan to retrench staff this year (compared to 9% last year).
The number per company retrenched or to be retrenched this year are:
3.7 Staff Turnover
Slightly less companies experienced staff turnover this year, 84% compared to 87% last year. Across all sectors, the average staff turnover for 2008:
For year 2009, the turnover is expected to be similar:
3.8 Entry-Level Salaries
Entry-level salaries for Nitec, PSC (Secretary), Diploma, Degree (Engineering) and MBA holders remain unchanged. For GCE ‘O’ and ‘A’ levels, Higher Nitec, Degree (Others) holders, they increased by 2% to 5.7%.
3.9 Regular Staff Training Hours Per Employee
67% of companies have some form of regular staff training and the number of training hours per employee this year are:
3.10 Once-off ‘Inflation’ Bonus
45% of companies have paid or are planning to pay the “once-off Inflation Bonus” to their employees;
- one-third of whom paid or will pay $100 to $300 and
41% on the other hand, have no intention to pay while 14% are undecided.
3.11 ERP Reimbursement
57% of companies reimburse ERP charges and among these companies,
- 88% of companies reimburse fully while
3.12 Petrol Reimbursement
Current reimbursement rates have remained relatively unchanged over the years but with many companies facing increasing requests to increase their reimbursement rates, this is likely to change. Current rates are shown in the table below.
Even the Chemicals & Related industry which pays the highest reimbursement, their rates are only slightly higher as shown below:
3.13 Air Travel
Due to recent increases in the cost of air travel, 48% of respondents have curbed overseas travel.
16% of respondents downgraded their travel eligibility from Business to Economy class.
3.14 HR Out-Sourcing
19% of the companies have already out-sourced part of their HR services;
- 71% in payroll processing and
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