TODAYonline

A 4.3% wage hike, really?

ESTHER NG

estherng@mediacorp.com.sg

RETRENCHMENT, recession and wage cuts have been the gloomy buzzwords lately — so the latest Mercer study on wages is raising eyebrows.

According to the global HR company’s survey of232 multi-national and Singapore companies, conducted in the third week of November, average base salaries for para-professionals, professionals, managers and executives are expected to rise by 4.3 per cent on average next year.

Across all industries, average base wages are projected to grow by 4.2 per cent next year — slightly less than this year’s 5.1 per cent, reported Mercer.

Mercer’s head of public relations Mylinh Cheong said the companies’ input shows “the economic crisis has not softened the Singapore market. Companies are still willing to invest in people and talent that is hard to find”.

But Citi analyst Chua Hak Bin was surprised. “It doesn’t square with the current economic climate of job cuts and general containment of cost.

“Even in boom times, the average wage increase in Singapore is modest. And wage growth for next year should be much weaker than this year,” he told Today.

With several companies in recent weeks havingimplemented wage and hiring freezes, Mr Koh Juan Kiat, executive director of the Singapore National Employers Federation, said: “An average figure is not a good indicator because there are wide variations in salary increments due to differences in companies’ performances. You have some freezing wages at one end, but at the other end, you will have companies paying peak salaries because there is a shortage of skill in that field.”

According to the Mercer survey, wages in the electronics manufacturing sector would see the slowest growth, at2.9 per cent, while the consumer goods sector could enjoy the fastest at 5 per cent.

Pasir Ris Member of Parliament Charles Chong thought the forecast could be based on this year’s performance, when “a number of company did well”. He added: “But we shouldn’t be too euphoric about next year — the question is not how tough the economy is going to be, but for how long.”

Economic growth for next year is expected to dip to between —1 and 2 per cent.

Still, there are some sectors in a tight labour market that should continue to be hiring — such as good sales and marketing staff, who are needed to bring in revenue and help companies survive, according to HR experts.

Recalling how IT jobs were in demand when the economy was recovering from the 2001 downturn, Mr Roger Olofsson, associate director at Robert Walters, told 938LIVE: “What happens in a downturn is that companies try to cut costs, and they defer IT investments in new systems and run longer on their old systems.

“So, when the market comes back, it leaves a very large backlog of companies that have very old systems and they’re in desperate need to implement new systems.”

He also observed a growing need for contract and temporary jobs at the professional level. “We saw that market develop significantly in the last downturn and I think that will happen now. A lot of jobs that traditionally used to be offered as permanent jobs, now will be offered as 6 months, 12 months extendable contracts Many of these jobs will convert into permanent jobs when the market turns.”