SHRI/RDS Survey 2009/2010 on Recovery Actions.

1.0              Introduction

SHRI in conjunction with RDS surveyed 192 companies in August 2009 to find out about their wage increase, bonus and recruitment plans in the light of the expected economic recovery. Companies were also asked about the effects of the Government’s Jobs Credit and SPUR programmes and the fallout and longer term effects of the global financial crisis.


2.0              Summary of Key Findings

2.1     Though wage increases are down from last January’s projections, next year’s are likely to improve as companies become cautiously optimistic.

Undoubtedly, most companies agree the worst of the global financial crisis is over. More companies are satisfied about current business conditions and more than half of them expect the recovery to take place either over the next six months or the first half   of next year.

However, due to continued uncertainty and doubts about the sustainability of the   recovery, companies are reviewing their business strategies/models. Consequently,    many are, understandably, cautious in their wage, bonus and hiring plans.

2.2     Basic wage increases averaged only 1.3% this year a drop from the 1.5% projected in January earlier this year. Although many more companies froze wages than expected, only 5% have cut or plan to cut wages. The projected basic wage increase for 2010 is 1.6%.

2.3     Variable bonuses (excluding AWS) this year will average 1.6 to 1.9 months, lower than last year’s 2.0 to 2.4 months. This will result in a total wage decrease of about 2% for 2009 a significant drop from last year’s increase of 6.8%. Variable bonuses for 2010 are expected to drop slightly to 1.4 to 1.7 months.

2.4     On recruitment, 68% of companies hired or plan to hire this year (compared to 63% last year).

2.5     Despite the crisis, 94% of companies experienced staff turnover (compared to 85% last year) but the turnover per company is lower than last year’s.

2.6     15% of companies (compared to 10% last year) retrenched or plan to retrench staff this year, however the number to be retrenched per company is lower than last year’s.

2.7     Entry-level salaries are generally higher than those of the previous six months except for engineering and other degree holders whose salaries dropped by 2% and 0.3% respectively.

2.8     While only 12% of companies were impacted by the H1NI epidemic, companies from more than half of the industry sectors are being affected in some degree or other with three sectors Food & Beverage/Hotels, Healthcare/Pharmaceuticals and Services being most significantly affected.

2.9     Practically all companies reported benefiting positively from the Government’s Jobs Credit and SPUR programmes.

2.10   As a result of the global financial crisis, many companies will be experiencing unprecedented change as they review their business strategy/model and prepare for slower growth.


3.0    Key Findings

3.1    Business Prospects

Current:                72% of companies reported satisfactory or better prospects (slightly higher than January 2009’s 66%)

-  The most satisfied sectors were Construction, Education and Government & Related;

-  The least satisfied sectors were Consumer Products/Retail, Electronics Manufacturing, General Manufacturing and Marine/Shipping.

Next 6 months:       30% of companies expect prospects to improve, 60% expect no change and 10% expect prospects to worsen

-          most optimistic sector is IT/Hi Tech;

-          least optimistic sector is Consumer Products/Retail.


Out of a total of 19 sectors, all, except for two (Government & Related and Education) experienced some form of unsatisfactory business conditions.

European companies did well (76% satisfied with current prospects).
Japanese companies are the most optimistic over the next six months as more than 40% expect conditions to improve.

In terms of Company size, small companies fared better than the rest (75% satisfied or better) compared to 70% of medium-sized and 69% of larger companies.
The small companies are also the most optimistic over the next six months with
38% expecting conditions to improve compared to only 27% and 23% of medium-sized and large companies respectively.


3.2     Basic Wage Increase

Overall, wages will increase by 1.3% this year (1.2% for managers, 1.3% for executives and 1.3% for non-executives), a slight drop from the 1.5% projected in January this year.

Many more companies are freezing wages this year (60% compared to 38% earlier this year) but only 5% have cut or plan to cut wages.

45% of companies increased wages this year, a very significant drop from the 59% reported in January.

Highest Paying Sector   : Construction & Related (3.1% to 5.0%)
          Lowest Paying Sector   : IT/Hi Tech (0% to 0.7%).

European companies paid the highest increases (1.8% to 1.9%) while local companies paid the lowest (0.8% to 1.1%).

In terms of size, small companies paid the highest increases (1.6% to 1.8%)

The basic wage increase projected for 2010 is 1.6% for all staff categories.



Instead of the 38% projected in January, 64% of companies froze wages in 2009 and 5% of the companies cut wages. 26% of companies plan to freeze wages in 2010.


3.3    Variable Bonus (excluding AWS)

For 2009, the variables bonuses averaged:

1.9 months for Managers
1.7 months for Executives
1.6 months for Non-executives

Highest Paying Sector   - Government & Related (2.4 to 2.8 months)
Lowest Paying Sector   - Education & Related (1.1 to 1.3 months)

Large companies paid somewhat higher bonuses (1.9 to 2.1 months) than the medium-sized and small companies. 

Local companies, on the other hand, paid slightly more (1.8 to 2.1 months) than Asia Pacific, European, Japanese and US companies.

For next year, bonuses are expected to be somewhat lower:

1.7 months for Managers
1.6 months for Executives
1.4 months for Non-executives

Highest Paying Sectors- Engineering & Related and General Manufacturing (1.8 to 2.3 months)
Lowest Paying Sector   - Electronics Manufacturing (0.8 months)


3.4     AWS

Most companies (78%) paid an AWS averaging 1.1 month of basic salary.
Only one company cut AWS.


3.5     Recruitment

A total of 68% of the companies hired or plan to hire staff this year. While this is significantly higher than the 40% reported in January this year, the number of recruits per company is lower than that indicated earlier.   

34% of companies plan to hire next year.

The numbers recruited per company this year and for next year are:
















3.6     Retrenchment

15% of the companies retrenched or plan to retrench staff this year, higher than the 7% reported earlier in January. The number retrenched also is higher than that reported earlier. 

The average number of people per company retrenched last year and the number to be retrenched are:
















3.7     Staff Turnover

Most companies (94%) in 2009 experienced staff turnover in August. This is higher than the 85% reported in January but the turnover is lower that that of January.  Across all sectors, the average staff turnover for 2009 was:

5% for Managers
5% for Executives and
7% for Non-executives. 


For next year, the turnover is expected to increase somewhat to

6% for Managers
6% for Executives and
8% for Non-executives.


3.8     Regular Staff Training Hours 

About 57% of companies provided regular staff training to their staff; higher than the 50% in January but the number of hours per employee was significantly lower in August.

The average numbers of training hours per employee are: 
















3.9      Entry-Level Salaries 

Entry-level salaries for GCE ‘N’ and ‘A’ levels, Nitec, Diploma (Others) increased by 3.5% to 5.2% while those for GCE ‘O’ levels, PSC (Secretary) and Diploma (Engineering), increased by 1% to 2%.

Entry-level salaries for Degree holders for both (Engineering) and (Others) decreased slightly by about 2% and 0.3% respectively.


3.10  Business Impact (H1N1)

While only 12% of companies reported that they are being affected by the H1N1 epidemic, companies from more than half of the industry sectors are being affected in some degree or other.

         Three sectors are significantly affected due to reasons like reduced tourist arrivals, increased precautionary expenses and increased staff absenteeism. These three sectors and the proportion of companies affected are:

                                      Food & Beverage/Hotels                                   45%
                            Healthcare/Pharmaceuticals                               40%
                            Services                                                           31%


 3.11       Recovery Expectation

         Only 12% of companies are experiencing some form of recovery.  

27% expect the recovery to come in the next six months, 32% in the first half of next year and 17% in the second half of next year. 

Only 6% say the recovery is still far off. 


3.12          Government Resilience (Jobs Credit & SPUR) 

            The positive effects of the Jobs Credit scheme and the proportion of companies reporting them are:

            Reduced Losses                                                                       53%
            Reduced Staff Costs & Expenses                                  
            Increased Profits                                                                      23%
            Enhanced Training                                                                    22%
            Avoided Retrenchment                                               
            Reduced Retrenchment                                            

             The effects of the SPUR programme and the proportion of companies reporting them are:

            Reduced Staff Costs & Expenses                                                 60%
            Improved Productivity & Staff Morale                    
            Enhanced Job Match                                                          
            Enhanced Training                                                              
            Course Mismatch                                                                


3.13           Fallout / Longer Term Effects

            The fallout and longer term effects of the financial crisis and the proportion of companies reporting them are: 

            Business Strategy/Model to be reviewed                                     59%
            Slower Growth                                                        
            Staff more resilient                                                        
            Company Expansion                                                       





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