SHRI/RDS
2014 Survey on Business Prospects/Wage Increase/Bonus & Missing Link in
Productivity.
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1.0
Introduction RDS surveyed 123 companies in December 2013 to find out about their business
prospects, wage, bonus and recruitment plans. Companies were also asked for their views on the missing link
(employee attitude & organisational culture) in productivity. 2.0
Summary of Key Findings 2.1
Companies are slightly more optimistic than six
months ago but are still somewhat careful on wage increases, bonuses and
recruitment. 2.2
2013’s basic wage increase averaged 4.1 to 4.3% slightly higher than the
4.0% in 2012; -
for
2014, it is expected to be similar to last year’s levels at around 4.1 to
4.2%. 2.3
Last year’s variable bonus (excluding AWS)
averaged 1.8 to 2.1 months; - for 2014, they are also likely to be
maintained at 1.8 to 2.1 months 2.4
The total wage increase for 2013 was 5.0%, and
with the Consumer Price Index at 2.4%; the real wage increase was 2.6%; - for this year, the total wage increase
is expected to be 4.0%, and with CPI expected to be around 2.8%, real wages
are expected to increase by 1.2% 2.5
On recruitment, 81% of companies hired staff in
2013, higher than the 78% in 2012; - this year, however, not only are there less companies
hiring (67%) but the number to be hired is also expected to be lower. 2.6
Fewer companies retrenched, 6% in 2013 compared
to the 12% in 2012. - for this year
only 4% of companies, so far, expect to retrench. 2.7
Staff turnover was higher in 2013 than the year
before; - for 2014, less
companies are expected to experience staff turnover, 54% compared to 90% in
2013 and the turnover rate is also expected to be slightly lower. 2.8
Entry-level salaries hardly increased except for
GCE ‘O’ and Higher Nitec qualifications which
increased by only $50 compared to six months ago. 2.9
On the missing link to productivity, it is interesting
that while practically all companies agree that Employee Attitude and
Organisational Culture affect productivity, less than a third think that
emphasis on HR practices is paramount; - we think this
is a disconnect between what HR and top management truly believe and practise
and unless this is bridged, companies are missing out on this crucial link in
productivity improvement.
3.0 Key Findings 3.1 Business Prospects Current: 88% of companies reported satisfactory
or better business prospects compared to 85% in June last year -
the
most satisfied sectors are Construction, Education, F&B/Hotels and IT/HiTech. Fewer companies
reported unsatisfactory business prospects 12% compared to 15% six months ago -
the
least satisfied sector is still Consumer Products/Retail, similar to six
months ago.
European companies were the
most satisfied (100% satisfied or better) followed by Japanese (96%) and
local companies (84%). US companies were the least satisfied (78%). Large companies fared better
than the rest (97% satisfied or better compared to 83% of small and
medium-sized companies). Next 6 months: 23% of companies expect
prospects to improve, 73% expect no change while 4% expect prospects to
worsen. -
Trading
is the most optimistic sector, -
Electronics
sector is the least optimistic.
European
companies are most optimistic over next 6 months, (were the least optimistic
last year) while US companies are the least optimistic. In terms of size,
large and small companies are optimistic, while medium companies are least
optimistic. 3.2 Basic Wage Increase The wage increase
in 2013 averaged 4.1 to 4.3%,
higher than the 4% in 2012. Highest
Paying Sector : Financial/Insurance (6.7 to 8.4%) Lowest Paying Sector : Construction
and Related (2.6%). In 2013, 3% of companies
froze wages, less than the 11% in 2012. For this year 2014, the
wage increase will average 4.1 to 4.2% with only 2% of the companies planning
to freeze wages; as for wage cut, no company is planning to do so.
For 2014, the sector
expecting the highest wage increase continues to be Financial/Insurance (5.9%
to 6.9%). And for the lowest wage increase, it is the 3.2 to 3.5% of the
Logistics sector. While large companies expect a wage increase
of only 3.9% this year, the medium and small companies expect to pay 4.1 to
4.5 %. Asia Pacific companies,
on the other hand, which paid the highest increases of 5% to 6% also expect to pay the highest increases of 5 to 5.7%
this year. 3.3 Variable Bonus
(excluding AWS) For
2013, the variables bonuses averaged: 2.1
months for Managers 1.9
months for Executives 1.8 months for
Non-executives. Highest
Paying Sector – Oil & Gas (2.4 to 3.4 months) Lowest
Paying Sector – Consumer Products/Retails at 0.8 month Large companies paid higher
bonuses (2.3 to 2.7 months) than the 1.5 to 1.8 months of the small and
medium-sized companies. Slightly more companies in
2013 paid bonuses, 90% compared to the 89% in 2012. For
this year 2014, 82% of companies expect to pay some form of bonus and the
bonuses are expected to be: 2.1
months for Managers 1.9
months for Executives and 1.8 months for
Non-executives.
The highest bonus paying sector next year
will be Financial/Insurance sector which expect to pay bonuses at 2.9 to 3.4
months while the lowest paying sector, will continue to be Consumer
Products/Retails sector at 0.8 months. In 2013, 85% of companies paid an average of 1.1 month while for
next year only 82% of companies expect to pay the AWS. 3.5 Recruitment In 2013, a total of 81% of the companies hired staff, higher
than the 78% in 2012. For this year 2014, 67% of the companies plan to hire staff. The average number recruited per company in 2013 and the number
to be recruited this year are:
16% of companies froze recruitment in 2013 and for this year,
15% expect to freeze recruitment. 3.6 Retrenchment 6% of companies retrenched in 2013, slightly fewer than the 12%
in 2012. For this year, 4% of the companies, so far, plan to retrench. 3.7 Staff
Turnover Last year, 90% of companies
experienced staff turnover, higher than the 84% in 2012. The annual
turnover rate for 2013 averaged: 5% for Managers 8%for Executives
and 9% for Non-Executives. For this year less companies (54%) are likely to experience staff
turnover and the turnover rate is also expected to be slightly lower. 3.8
Total Accumulated Monthly Variable Component (MVC) in % Slightly more
companies, 53% compared to 56% in 2012, paid the MVC in 2013 and the average
accumulated amount is more than the 7.8 to 8.5% in 2012. In 2013 the MVC
averaged: 9.5% for Manager 9.2% for
Executives 9.4% for Non Executives.
3.9
Entry-Level Salaries
Little change in Entry-level salaries,
compared to six months ago. There was only a slight increase of $50 or 3.3%
to 3.6% for GCE “O” and Higher Nitec holders. 3.10 Missing Link in Productivity &
Innovation Improvement When Microsoft abolished employee ratings recently in order to
improve teamwork and innovation, we were reminded that some companies only
pay lip service to HR practices so we set out to find out how many companies
truly believe in good HR practices and “walk the talk”. And, although, international research and our surveys have shown
time and time again that employee attitude, satisfaction and commitment have
a great impact on productivity and innovation, these
factors are hardly the focus and priority of top management. Hopefully by asking companies how important really are Employee Attitudes and Organisational
Culture and which management practice affect productivity most, we would get
an idea. The results are somewhat surprising. While practically all companies agree that Employee Attitudes
and Organisational Culture affect productivity, it is somewhat surprising
that less than a third of companies think that emphasis on HR practices is
paramount. Consequently, there is a disconnect
between what HR can do and what top management actually does. It is apparent
that unless HR can influence top management to “walk the talk”, they are
missing out on this crucial link in productivity & innovation
improvement. 3.10.1 Employee Attitudes and Organisational Culture 98% of companies agree employee attitudes can affect
productivity, while the other 2% are unsure. For Organisational Culture, 97% of companies agree it can affect
productivity, while 1% disagreed. 3.10.2 Managerial Practice that Most affect Productivity
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