More firms plan layoffs, higher pay increases

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Published September 16, 2008

More firms plan layoffs, higher pay increases

Poll also shows number of intended recruits in '09 may be higher than in '08

By CHUANG PECK MING


MORE layoffs are on the cards, and wages are likely to jump and stay up in 2009 despite an expected economic slowdown.

Eleven per cent of 218 companies polled last month have retrenched or plan to retrench workers this year. And while this compares with 9 per cent in 2007, it is a big increase from just 2 per cent six months ago.

The poll was taken by Remuneration Data Specialists (RDS) and the Singapore Human Resources Institute (SHRI).

The unemployment rate is already up, but it may not go as high as feared.

According to the poll, more companies - 86 per cent versus 81 per cent in 2007 - added or plan to add staff this year. And while the number of extra staff is lower than last year, it is higher than expected six months ago.

What's more, the number of intended recruits next year is likely to be higher than that this year.

Wage increases are also projected to be surprisingly high at an average of 5 per cent, though this represents a slight dip from the increase tipped for this year.

Pay looks likely to rise 5.3 per cent in 2008 - higher than the 4.5 per cent jump in 2007, even though RDS and SHRI say many companies have started to brace themselves for the fallout from the credit crunch in the United States.

There will also be more companies upping wages in 2008 - 95 per cent against 91 per cent in 2007.

Employees in engineering and related businesses are likely to see their pay rise 6.6-7.4 per cent this year, the biggest increase among all employees. The lowest pay hike is expected in electronics manufacturing - at 4.1-4.2 per cent.

The higher pay rises reflect higher inflation. Forty-five per cent of companies polled have given or are planning to give a one-off inflation bonus as recommended by the National Wages Council. This bonus - to help employees cope with higher living expenses - ranges from $90 to $500.

Some 57 per cent of companies polled reimbursed ERP charges in full or part. But 48 per cent curbed overseas travel and 16 per cent downgraded employee travel eligibility from business to economy class.

Variable bonuses are expected to average 2.1-2.5 months in 2008, similar to 2007.

Entry-level salaries for secretaries, diploma, engineering degree and MBA holders remained largely unchanged between January and August this year. For others, the starting pay has gone up 2-5.7 per cent.

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