2 in 3 employers to hike wages at least 6% in the next 12 months

Companies in the service industry are the top companies planning an increase.

Almost two and three SMEs and 86% of large companies expect to increase salaries of employees in the next 12 months, according to the latest survey on manpower and wages by the Singapore Business Federation.

On average, Singapore companies who are expected to raise salaries in the next 12 months will increase it by 6%. The average increase for SMEs is 7% whilst large companies are planning to increase wages by 4%. 

The report said this comes as 35% of businesses expect business conditions to worsen in the next 12 months compared to 28% who are expecting it to improve. The hike in wages will contribute to increased business costs.

Three in five companies (61%) indicated that inflationary pressure leading to increased business costs is the top factor impacting their businesses. 

According to Kok Ping Soon, CEO of SBF, businesses still expect the employment outlook to be positive even as business conditions have weakened.

“Nonetheless, there are sectors that expect to do well just as there are sectors that will continue to face headwinds. Hence, differentiated and sustainable wage growth that keeps up with the underlying productivity growth of the sectors is important. Training and upskilling of the workforce are key contributors to increased productivity growth. While there is no shortage of training programmes with a high level of awareness and generous funding support, we need to address the operational challenges of companies by considering more on-the-job training instead of structured training that takes the employees away from the workplace and strengthens the linkage between training and job roles.” Kok said.