Workers promoted with no pay rise ‘more common than thought’

Workers promoted with no pay rise ‘more common than thought’
White collar workers seen at the Central Business District. Photo: Koh Mui Fong.
Only 17 per cent of Singaporean companies always provide a salary increase with a promotion

Published: 1:05 PM, October 17, 2016
Updated: 11:02 AM, October 18, 2016

SINGAPORE — A promotion at work in Singapore does not always come with a bigger pay cheque, a recent survey shows.

Research by recruitment company Robert Half found that just 17 per cent of Singaporean companies always give a pay rise with a promotion.

The annual study surveyed 100 chief financial officers and finance directors in Singapore. Mr Matthieu Imbert-Bouchard, managing director of Robert Half Singapore, said that promoting workers without a salary increase is “far more common” in Singapore than people might think.

The study shows that the size of the company may not really matter, because 21 per cent of medium-sized companies are more inclined to always give a pay rise with a promotion, as are 15 per cent of both large and small companies.

About 43 per cent of the finance leaders surveyed said that the main reason for promoting employees without attributing a corresponding salary increase is because they wanted “to assess an employee’s performance first before remuneration is increased”. Other reasons given for not giving a pay rise with a promotion included the lack of “financial resources to increase salaries” (22 per cent), the promotion was given because “the role had to be filled urgently” (11 per cent), and the remuneration was already too high for the employee’s previous position (7 per cent).

While receiving a promotion is “a clear sign of confidence in an employee”, Mr Imbert-Bouchard said taking on a more senior role and more responsibilities without getting a salary increase can negatively impact an employee’s motivation which, in turn, can influence their decision to change jobs. 

“When employees don’t receive a salary increase when promoted, it is vital to explain the reason, as well as potential targets that the employee needs to reach within a certain timeframe in order to receive a salary rise,” he said. 

As for the employees, Mr Imbert-Bouchard said that those who are promoted without a corresponding pay rise should consider negotiating non-financial benefits.

“It is important for employees to remember though, that the challenge of taking on a more senior role and additional responsibilities can result in more career advancement in the future, which eventually may make up for the lack of financial rewards,” he added. However, there is no denying that a pay rise is a very effective retention tool. “Many employees are prepared to work hard knowing the reward will be a promotion with a better salary and bonus,” he said.