Salaries rising fast but hikes sustainable: exec

Published July 17, 2007

Salaries rising fast but hikes sustainable: exec

By JANICE HENG


SALARIES in Singapore may be rising fast, but the increases are still sustainable, a top executive at global recruitment firm Kelly Services told BT.

Said Dhirendra Shantilal, senior vice-president for Kelly Services Asia-Pacific: 'They have not reached critical points as yet. I don't see huge spikes in salaries over the next 12 to 18 months.'

The Singapore Human Resource Institute and Remuneration Data Specialists expect basic remuneration to rise 4.1 per cent on average in 2007.

The tight talent market is good news for employees, but less so for companies. 'It is a worry, because I think that when a talent shortage happens, it puts a pressure on costs,' he said.

In India, for example, skilled workers moving from one job to another may enjoy increments of 20 to 30 per cent. Talent shortages become worrying when movement of individuals leads to such inflated salaries, said Mr Shantilal. 'The costs go up significantly higher than the productivity level of the individual.'

Salary increases here remain sustainable, said Mr Shantilal, although they are rising at 'a much faster rate than five years ago'.

'However, the government is also easing the squeeze by allowing foreign talent to come in,' he said.

Singaporean companies are recruiting from places such as China, India, Russia and Eastern Europe, but cross-border recruitment - although growing - remains limited. Only about 10 per cent of Kelly Services' work here involves inbound or outbound recruitment, estimates Mr Shantilal.

And while more companies are warming to contract workers, the tight talent market has made workers more keen on permanent jobs - putting greater pressure on the supply of contract workers.

In any case, the talent shortage is global. Last month, Kelly Services acquired Singapore recruitment firm P-Serv to enter China's staffing market, expected to be worth $2.5 billion in 2007.