How much salary increase will you be getting in 2012?

Don't expect too much as salary increases are expected to remain stagnant at 4.4% next year.

According to Hay Group’s report, talent retention is still a major focus for companies, with 88 percent of surveyed organisations looking into retaining and engaging their workforce.

Mr Victor Chan, Regional General Manager in Singapore and ASEAN for Productized Services, Hay Group, said, “In light of the subdued economic outlook, companies are looking once again at how to do more with less. Hence, having employees who are willing to go the extra mile is critical for business success. However, their discretionary efforts will be wasted if companies do not support them for success e.g. by removing red-tape, providing adequate resources. Otherwise, their additional efforts will not translate into business results.”

The Hay Group report also showed that organisations are deploying levers such as career advancement opportunities, leadership programmes and mentoring and coaching to engage talent. Career advancement opportunities ranked at the top at 35 percent, followed by leadership programmes at 33 percent and mentoring and coaching at 26 percent.

Ensuring market competitiveness through reward (62 percent) and increasing productivity (53 percent) are the next top business challenges for organisations, according to the report.

Salary increases
Actual average salary increases (excluding pay freeze) are 4.4 percent for 2011 while average salary increases for 2012 are forecasted at 4.4 percent. The top three sectors with the highest salary increases (excluding pay freeze) are Banking and Financial Services (7.0 percent), Transportation (4.9 percent) and FMCG (4.6 percent).

Mr Chan said, “Traditionally, the market trend around actual and forecast for salaries indicates a higher salary forecast for the following year. This time around, we’ve observed that the forecast is stagnant.

Although the outlook for 2012 is less optimistic, the tight labour market in Singapore will nevertheless ensure that salary increments remain positive.”

Bonus projections
The Hay Group report showed that the actual average variable bonus (i.e. performance-based bonuses excluding annual wage supplement, contractual bonuses) is 2.7 months for a 12-month period. This is slightly more than the average of 2.3 months in 2010.

Senior Management will have something to cheer about this festive period, receiving the highest average bonus payout of 3.6 months. Middle Management will look forward to 2.8 months, the second highest average bonus payout, while Junior Professionals and Clerical Support will receive an average bonus payout of 2.4 months and 2.2 months respectively.

The forecast average variable bonus payout is 2.7 months for the coming 12 months.

Hiring outlook for 2012
Reflecting the downward business sentiment, 46 percent of the surveyed organisations plan to increase staffing levels by five to 10 percent, compared to 62 percent this time last year.

The Hay Group report stated that the employee group in high demand are Technical Specialists (62 percent) and Junior Professionals (47 percent). Middle Management is seeing the highest cutback among the groups at 35 percent.

Looking by job functions, the main focus of recruitment is on Engineering (30 percent), Sales (29 percent), Finance & Accounting (27 percent) and Administration/Support Service (27 percent).

Mr Chan said, “To sustain performance in the uncertain economic climate, organisations may consider looking at providing clear direction about organisational priorities to help people focus on the highest-value tasks and encouraging superior levels of teamwork both within and across business units to help everyone cope with work demands.

“As businesses are operating with leaner resources, it is imperative that organisations continue to invest in training and development to get the best out of their existing talent force and provide them with the opportunity to gain exposure to other key functional business areas within the organisation.”

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Tags: employee salary increase 2012, singapore workforce, Banking and Financial Services, Transportation, FMCG