Employees in Singapore can expect slower wage growth this year
The wages of Singapore citizens and permanent residents are expected to grow at a slower pace in 2023 due to the economic slowdown, according to the Monetary Authority of Singapore (MAS).
The central bank and financial regulatory authority of Singapore attributed this to a combination of the continued influx of employees into the country and a softening of demand for labour. Nevertheless, MAS expects wage growth to remain above historical averages.
In its biannual macroeconomic review, MAS noted that the rise in wages is likely to be uneven across sectors. Travel and domestic-oriented sectors such as construction, retail, and food and beverage are expected to see higher growth, while the civil service, healthcare, and education sectors will support overall resident wage growth. This is due to policies aimed at uplifting the incomes of lower-wage employees, such as enhancements to the Progressive Wage Mode, taking effect.
Although the resident unemployment rate has remained low, MAS cautioned that it may not fully reflect the challenges employers face in finding employees due to a persistent skills mismatch between labour demand and the resident workforce. For instance, the increased demand for digital solutions such as e-commerce and work from home applications has raised the need for more software developers and employees conversant with digital technologies.
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Surveys conducted by MAS in December 2022 and early 2023 indicated that the pace of hiring should ease in H1’2023, although the employment outlook is likely to have deteriorated since then due to turmoil in the international banking sector. While employment growth in the modern services cluster is likely to slow further, the extent of net employment losses should be contained, given the strong structural demand for finance and tech professionals in Singapore, reported The Straits Times.