Optimism prevails as employers in Singapore commit to wage increases

Large organisations consistently outpace SMEs in wage growth, indicating a positive trend in salary increases over the next year.
By: | September 14, 2023

Despite economic uncertainties, the majority of employers in Singapore are planning to increase employee salaries in the coming year.

It was found that 67% of employers plan to raise wages over the next 12 months, with an average projected increase of 6%. In contrast, 32% of organisations intend to freeze pay, while only 1% are considering pay cuts.

This was according to the Singapore Business Federation’s (SBF) Survey on Manpower and Wages, which included responses from 282 organisations, encompassing both small and medium-sized enterprises (SMEs) and large organisations across various industries.

Although a significant portion of employers still commit to pay hikes, the survey showed a decline in optimism compared to the previous year. In the past 12 months, 76% of respondents reported wage increases, whereas the current figure stands at 67%.

When the data is broken down by organisation’s size, it becomes evident that larger organisations have consistently increased salaries. In the last year, 88% of large organisations raised wages, and 86% plan to do so in the next 12 months. Among SMEs, 73% increased wages in the last year, with 62% planning to continue this trend.

Overall, 61% of respondents have both increased salaries in the past year and intend to do so in the next 12 months.

READ MORE: Singapore’s job market remains resilient as hiring continues

Associate Professor Walter Theseira, an Economist at the Singapore University of Social Sciences, noted that while nominal wage increases have been relatively high, they have barely outpaced inflation. Adjusting for inflation, real wages only grew by 0.4%, despite a 6.5% nominal wage increase in the previous year.

Despite expectations of weaker economic conditions, higher costs, and lower revenues, 89% of employers anticipate either no change or an increase in full-time employees in the next 12 months, signalling a positive employment outlook, reported The Straits Times.