Singapore's pay gap rose 12% since 2008
Senior-level salaries rose steadily in order to lure talent with sought-after soft skills.
The pay gap between Singapore’s lower-level employees and senior managers has expanded 12.1% since 2008, representing the fourth-highest increase in the region, a report by organisational consulting firm Korn Ferry revealed.
That said, it was still lower than the average increase of 15.3% across the region. India led the growth with a dramatic increase of 66% in the pay gap, followed by Malaysia (14.73%) and Indonesia (12.72%).
“Whilst the average increase in Asia at 15.3% seems moderate for a 10-year period, salaries at senior level have risen steadily due to the increased need to have talent that can grow the business and take organisations global,” Korn Ferry Singapore’s associate client partner, Kartikey Singh said in a statement. “At the same time, economic and inflationary growth have also contributed to significant salary increases at lower level, which in turn leads to moderation in the pay equity gap.
Going forward, as businesses feel the pressure of technological disruption and the crunch of good middle and top-level leaders, the gap might widen at a faster pace, Singh noted.
According to Bob Wesselkamper, Korn Ferry’s global head of rewards and benefits solutions, automation and offshoring at the lower end of the labour market means that enhanced productivity results in an abundance of available labor - more people than jobs – which slows the increases in pay.
“Meanwhile, at the higher end, there’s a shortage of people with important hard skills and proven experience, such as STEM. Organisations also have to compete for senior managers with in-demand soft skills, such as emotional intelligence, creative thinking and the ability to manage large and complex teams,” he said.
As a result, he noted that pay at the higher level is going up, and is likely to increase faster than other jobs.
But whilst a widening gap is the norm in the majority of nations, there were areas observed where the gap is narrowing. The pay gap is shrinking in countries like France and Italy, as a result of higher tax rates for big earners, fewer pay increases at top-levels, and government and union intervention in pay at the lower levels.