Employers in Singapore urged to offer financial support to employees
- Josephine Tan
Employers in Singapore should consider giving a one-time lump sum payment to employees, particularly lower to middle-income employees, to help them cope with rising costs, the National Wage Council (NWC) said in its wage guidelines for December 2023 to November 2024.
The NWC, comprising representatives from employers, employees, and the government, previously made similar recommendations during inflationary periods in 2008 and 2011. For unionised organisations, the payment details will be determined through mutual agreement between management and the union.
Peter Seah, Chairman of the NWC, emphasised the importance of providing this financial support to lower-wage and middle-wage employees, acknowledging the varying circumstances faced by employers.
The NWC also recommended a 5.5% to 7.5% increase in gross monthly wages for lower-wage employees, or a minimum pay raise of S$85 (US$62) to S$105 (US$77), whichever is higher. The increase should align with the organisation’s performance and outlook.
The Ministry of Manpower (MOM) expressed support for the NWC’s recommendations, endorsing differentiation based on performance and outlook and recommending a one-time lump sum payment to employees.
Kenny Tan, Deputy Secretary for Workforce at MOM, revealed that 30% of organisations have met or exceeded recommendations for raising the salaries of lower-wage employees. However, the remaining 70% of organisations may not have increased wages to the extent suggested by the NWC. He also highlighted that while 89% of resident employees have either a monthly variable component or an annual variable component in their salaries, only 22% had both in 2022, as recommended under the flexible wage system.
The government, in partnership with tripartite organisations, continues to encourage employers to focus on business and workforce transformation.
READ MORE: Narrowing Singapore’s wage gap and promoting lifelong learning
Robert Yap, President of the Singapore National Employers Federation, echoed the NWC’s emphasis on fair and sustainable wage increases but acknowledged the challenges faced by small and medium-sized enterprises (SMEs) due to the uncertain economic outlook.
“My encouragement to SMEs is to look at transforming to look at being more relevant because if you stay like that, without any transformation, in the long term, it is going to be harder and harder to be able to sustain,” he said, reported CNA.
