7 out of 10 Singapore employers promote without pay rise

Would you still care for a promotion?

Most employees would have had the experience of working harder without any reward. Now many companies are going a step further by promoting employees to more senior positions without providing a pay increase.

In fact, Singapore companies are among the most frequent to do so. According to a survey conducted by leading specialised recruitment firm Robert Half, 68 per cent of Singapore’s Human Resource (HR) managers say they often give promotions without pay rises.

The survey, conducted across 17 countries with 1,800 HR managers, reveals that the practice is widespread in Singapore, with Chile (76 per cent) and China (70 per cent) the only two countries where the practice is more common.

In contrast, only 26 per cent of HR managers in Japan promote without pay increases, with 66 per cent saying they would never use the practice.

According to the survey, 53 per cent of Singapore companies promote without pay because they prefer to offer a performance bonus instead, while another 47 per cent prefer to offer their employees more flexible working hours. Additional annual leave is also offered by 35 per cent of HR managers in lieu of additional pay.

Ms Stella Tang, Director of Robert Half Singapore said, “Employees like a challenge, but there are risks for companies offering a promotion without a pay rise. While pay is not the only factor employees consider, if companies do not provide adequate compensation either through pay or other benefits, then they may lose their top performers to the competition.”

“In particular, within the banking & financial services and commercial sectors, companies are struggling to get the right finance and accounting professionals to fill jobs. If an employee with the right skills tests their worth in the employment market, they may find they have several job offers to choose from.”

“If budget constraints mean no additional monetary compensation can be offered, the reasons why need to be clearly communicated. This is the key to maintaining the employer-employee relationship and ensuring employees feel valued and continue to increase productivity.”

“For some employees – especially those with families – offering more flexible work arrangements may be of more value than money. It comes down to whether an employee can come to an agreement with their employer that balances their professional goals with remuneration for their efforts,” Ms Tang said.