Salary increments and bonuses back on the corporate agenda
Amplified salary pressures and climbing attrition rates as employees lured by better remuneration packages.
Despite Q3 reporting cautious approaches to remuneration, Ambition‘s recent survey indicates that salary increments and bonuses are now firmly back on the corporate agenda.
Q4 poised to bring bonuses that could exceed 30% in Singapore
In Ambition’s quarterly client survey of more than 450 respondents from across Asia, it was encouraging to see that market confidence is returning, particularly so in Singapore. In Singapore, only 2% of respondents indicated that there would be no salary increment, whilst a very positive 86% of respondents in Singapore indicated that salary increments would be 2% to 6%.
Continuing with the positive news, it is also likely that the market will see an increased number of employees receiving a bonus this year. In fact, 69% of respondents in Singapore stated that the average employee can look forward to a bonus of up to 20%, encouragingly higher than the market has seen for some time. And at Director level the good news continues with 39% of respondents indicating that bonuses would be up to 20%, 51% of respondents indicating above 20% and 24% even indicated that bonus payouts could exceed 30%.
Attrition threat continues to climb for nearly 50% of Singapore-based businesses
On the downside, H2 2010 has seen a considerable shift in candidate’s confidence in the market as the number of candidates looking at opportunities outside of their current employment continues to increase. This has meant that the market is seeing a much higher level of attrition, reiterating the importance that employers need to ensure they are doing all they can to hold onto their best employees.
The survey results revealed that almost 50% of respondents in Singapore indicated that their attrition rates increased in 2010. 67% of which indicated that the main reason for this was due to employees being lured by better remuneration packages by competitors. This is a very real threat in what has quickly become a talent short market. However, the run up to Christmas offers some reprieve as employees wait for their bonus payout (normally in February/March time), but given growth is firmly on the agenda through 2011 for over 70% of respondents, the trend is set to continue.
Training, development and career progression key to employee retention
Paul Endacott, Managing Director, Singapore elaborates, “It is encouraging that the vast majority of employers are paying out salary increments and bonuses this year based on improved business performance. Nevertheless, given that the overwhelming reason employees have given for changing jobs is the lure of more attractive remuneration packages, employers need to focus on retaining their best people.
“As such, we expect most companies will offer a salary increment of between 2% and 6%, but based on our previous survey, candidate’s switching jobs will get an average increment of between 8% and 15%. It would be unrealistic and indeed unsustainable for companies to offer all employees salary increments of this size, so there needs to be a focus on retaining people through training, development and career progression. An increased attrition rate, coupled with the difficulties of attracting high caliber talent in a talent short and hugely competitive market like Singapore is possibly the greatest threat to business growth.”
