SINGAPORE (Jan 31): Singapore’s workforce is due for an average salary increase of 4% this year compared to 3.7% predicted in 2018, according to a forecast issued today by consulting firm Korn Ferry.
The data was drawn from Korn Ferry’s pay database of over 20 million job holders in 25,000 organisations across more than 110 countries. It showed predicted salary increases as forecasted by global HR leaders for this year, as compared to 2019 inflation forecasts from the Economist Intelligent Unit’s (EIU).
After adjusting for an inflation rate of 1%, real-wage salaries in Singapore are expected to grow by 3% in 2019, increasing from the predicted 2.3% for 2018.
This is in contrast to broader Asia, where average adjusted real-wage increases are down at 2.6% compared to 2.8% last year.
China and Japan are projected to weaken most significantly in terms of real-wage forecasted growth to 3.2% and 0.1% for 2019, as opposed to 4.2% and 1.6% predicted for 2018, respectively.
In a press release on Thursday, Korn Ferry notes that Singapore, India and Vietnam are the only exceptions to the region's declining forecasted inflation-adjusted real wage growth for 2019.
The firm also notes that demand for highly-skilled workers is particularly high in the service-driven economy, with the highest base salary movements in the oil and gas (O&G) at 4%, followed by the transportation, high-tech, chemicals and public sectors (all at 3%).
On the other hand, the lowest changes were seen in Singapore’s industrial goods sector, where base salary movements were forecast for 2% growth.
While Korn Ferry notes that its latest study reveals that “staggering” proportions of organisations in Singapore indicated that talent was scarce in the engineering (38%) and information technology (29%) functions, it highlights how employees within these functions receive a mere 2.8-3.4% salary increase.
This range comes in line with general market increases, instead of an expected salary premium, given the lack of talent shortages for such roles.
Globally, real-wage salaries are expected to grow at only an average of 1% in 2019, down from the 1.5% prediction for 2018.
“Compensation programmes need to be regularly reviewed to make sure they align with changing business and market conditions,” says Mirka Kowalczuk, Head of Pay and Engagement Delivery, APAC, Products Group, Korn Ferry.
"While inflation indices are a solid benchmark for reviewing market trends in pay, we recommend that companies take a broader perspective by defining and agreeing upon their own measures of cost drivers, business strategy and local trading conditions as part of their talent acquisition and retention strategy," she adds.
