Salaries for professionals in a wide range of industries are likely to face downward pressure through 2019, as companies predict conservative increases in the year ahead.
This is one of the key findings in the Hays Asia Salary Guide 2019, a report that highlights salary and recruiting trends based on responses from Hays Asia operating markets Mainland China, Hong Kong, Japan, Malaysia, and Singapore.
In addition, signalling salary inertia in Singapore was the stark rise in employers reporting conservative increments which are up to three per cent. In 2018, nearly one in three (32 per cent) employers had intended salary raises by this amount, but this figure leaps to 40 per cent in 2019.
Salary the Key
Salaries remain the primary consideration for employees in Singapore. Although more than half (57 per cent) of employees claim to be ‘satisfied’ with pay levels, only four per cent claim to be ‘very satisfied’.
According to Hays experts, employers looking to retain their best talent should review their salary increment plans, particularly because three in five professionals (60 per cent) cite compensation packages as the key reason for seeking out new roles, and it is the second most common reason for staying with a current employer.
Singapore candidates have also raised concerns over the transparency of pay level setting.
Although a clear majority (86 per cent) of employees feel that transparency is important, only one in ten (11 per cent) strongly agree and one in five (22 per cent) slightly agree that their organisation is transparent in this area.
“With positive sentiments surrounding the growth of the economy, business activity and hiring levels, employees may begin to wonder why this improvement is not being passed on to them in terms of compensation packages, perhaps leading them to rival organisations that could meet their salary expectations.
“Employers looking to keep employee satisfaction levels on salary matters should, therefore, be more upfront about how the management reviews and distributes employees’ pay rises,” comments Grant Torrens, Regional Director at Hays Singapore.
Bonuses and Benefits
The Hays Salary Guide 2019 reveals that fewer companies are compensating employees through alternative means.
Employers who stated that they offered no bonus as part of remuneration packages increased from nine per cent in 2018 to 12 per cent this year.
While the percentage of guaranteed bonuses is also declining (67 per cent in 2018 vs 63 per cent in 2019), slightly more employers are instead tying them to factors such as individual, company and team performance.
On top of offering bonuses, most companies (83 per cent) offer benefits in addition to financial packages. Health and medical benefits remain the primary offering.
Singapore leads the way in Asia in offering health and wellness programmes to employees as an added benefit. While on an Asia-wide average, only a quarter (25 per cent) of companies adopt such practices, nearly one in three (32 per cent) Singaporean employers provide it.
Raises
“For employees who do not feel that their compensation package matches up to their worth, we advise them to reach out to employers and request salary increases,” adds Grant.
“We realise that while only 36 per cent of the employees surveyed had asked for an increment, 15 per cent did so successfully. That means employees have a good chance of getting a pay rise by bringing it up to their line managers.”
“However, those requesting raises should consider the possibility of rejection and thus keep an open mind to potential responses from employers. Instead of salary increments, employees might be offered non-monetary benefits, improved work-life balance or a salary review at a fixed date soon.
“Failing that, employees could stand to benefit in becoming more active in the recruitment market, as the improving economy and optimistic business outlook is leading to greater hiring activity in Singapore.”
Compared with Asia
The 2019 Hays Asia Salary Guide reveals that salaries across the region rose less than they did in the previous year, with 15 per cent of employers saying that salaries remained unchanged as opposed to nine per cent in 2018. Japanese companies witnessed the greatest levels of stagnation, with 20 per cent seeing no change.
In addition, 45 per cent of organisations in Hong Kong, 34 per cent in Singapore and 45 per cent in Malaysia grew salaries by three to six per cent, though these numbers are also down from 2018 levels. However, ten per cent of companies in Mainland China increased salaries by more than ten per cent.
Over the coming 12 months, organisations in Malaysia (48 per cent), Hong Kong (45 per cent) and Mainland China (44 per cent) expect salaries to increase by three to six per cent, while those in Japan (52 per cent) and Singapore (40 per cent) predict increases of up to three per cent.
Employees have similar expectations, with those in Japan (42 per cent) and Singapore (29 per cent) believing that they can look forward to increases of up to three per cent, while employees in Hong Kong (35 per cent) and Malaysia (31 per cent) are more optimistic, hoping for three to six per cent increments.
Employees in Mainland China are the most bullish, with 44 per cent believing that their salaries will rise by more than 10 per cent in 2019.
Employees in four of the five regions polled cited ‘salary and benefits’ as the most common response as to why they are looking for a new employer, with 68 per cent of employees at Malaysian companies being the highest proportion with salary on their mind, followed by Hong Kong, Singapore and China (66, 60 and 57 per cent, respectively).
Only individuals in Japan favoured ‘new challenges’, though remuneration was their second choice at 52 per cent.
At 58 per cent, companies in Japan are most likely to award their employees bonuses of at least 50 per cent in 2019, while 14 per cent of companies in Singapore expect to pay out no bonuses at all.
Employers in Singapore (85 per cent), Mainland China (88 per cent), Japan (83 per cent) and in Malaysia (85 per cent) cite ‘individual performance’ as the primary reason for awarding bonuses, while in Hong Kong they were related to ‘company performance’ (84 per cent).
More employees in Asia are being awarded raises in 2019, with research showing that 22 per cent had raise requests accepted. Employees in Hong Kong are most likely to see pay rises granted, where 30 percent have been successful.
By contrast, 19 per cent of Malaysian employees saw pay rise petitions denied, while 68 per cent of employees from Mainland China are not likely to make an appeal for salary increments.