Singapore companies are adjusting wages and beefing up mental health benefits, bonuses, flexible working policies and more.
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In a normal year, lawyers at one of Singapore’s top four local law firms could expect to receive an annual raise of between 10-15%.
The company said employees will get a bigger raise this year, a former employee told CNBC. His salary jumped 40% and the increase was not related to a promotion, the person said.
This law firm is not the only company in Singapore to adjust compensation in a booming job market.
Southeast Asia’s largest lender, DBS, told CNBC it raised salaries across the bank in mid-2021. Accounting firm KPMG announced in May that the company will spend 25 million Singapore dollars ($18.23 million) on salary increases.
SPH Media Trust, a news and media publisher, also said it recently carried out a pay review to bring pay in line with market levels.
On the global front, tech giants Microsoft and Amazon have announced they will raise salaries for their employees.
Average increases have been significantly higher this year, and companies pay a premium to attract and retain workers, especially if talent is scarce in an industry, said Cynthia Ang, executive director of staffing firm Kerry Consulting.
Singapore companies are also making other adjustments to employee benefits in the form of mental health support, bonuses, flexible working policies and more.
“Singapore’s labor market is definitely leaning toward the tangibles of the deal – compensation and benefits – or viewing them as a major competitive battleground,” said Lewis Garrad, Mercer’s chief commercial officer in Singapore. .
About 60% of the 270 companies surveyed by Mercer reviewed their benefits in 2021, compared to 10% to 15% in previous years. That’s at least partly because of the tight job market, Garrad said.
Prudential Singapore gave each of its employees $1,000 worth of stock in October 2021, said Neetha Nair, who leads a team preparing the workforce for the future. The company has also given some workers credits to use to book coworking spaces as part of a hybrid working initiative, she said.
In February, Randstad Singapore began allowing employees to work remotely from anywhere in the world for up to four weeks a year, Daljit Sall, the staffing firm’s chief technology officer, told CNBC.
An employee of a local media company, who declined to be named because he was not authorized to speak to the media, said more people received promotions this year than in previous years.
“Usually there’s a cap in terms of numbers, so it’s pretty limited, but this time around they seemed to be trying to promote most people who deserved it,” he said.
Employees who successfully sponsor a new hire at Finn Partners can now receive SG$5,000 in two installments if the referred person stays with the company for at least a year, said Safina Samian, associate at the communications agency. This bonus was SG$1,000.
Finn Partners is also giving its employees four mental health days off, an annual $100 stipend for a wellness app subscription, and a half-day off one Friday a month, Samian said.
“We’re seeing a much wider range of health and wellness benefits,” said Ang of Kerry Consulting, citing self-care days and meeting-free days.
Some companies said the improved benefits were part of broad talent retention efforts to address the big quit, a global trend.
A senior DBS executive, who spoke on condition of anonymity because he was not authorized to speak to the media, said the bank had adjusted salaries to maintain morale and “so that we don’t lose out in the war of current talents you see in Singapore.”
Lee Yan Hong, group human resources manager at the bank, confirmed that the salary increases were made “to ensure that our employees continue to be paid competitively with the market”.
A spokesperson for SPH Media Trust also said it had increased salaries “to remain competitive in recruiting and retaining talent”.
Randstad Singapore’s Sall said the company’s remote work program was well received and helped minimize the push factors that encourage employees to seek new jobs.
But not all companies explained the reason for these changes.
The legal professional who received a 40% raise told CNBC that the law firm simply said it was doing a salary review.
“The feeling is that maybe they’re trying to offer more attractive salaries to keep up with what internal roles are offering, maybe fill the gap with what international companies are paying,” he speculated, although he has no supporting evidence. this.
The legal sector saw a record number of 538 lawyers leaving the profession in 2021, a 30% increase from the previous year, said the president of the Law Society of Singapore, Adrian Tan, in January.
The recent pay and benefits reviews are taking place against the backdrop of a competitive labor market in Singapore, whether or not companies explain the reasons for carrying them out.
“We’re in an extraordinarily tight job market,” Mercer’s Garrad said. He pointed out that Singapore has historically depended on foreign talent and that Covid-19 has made it difficult to attract such workers over the past two years.
While official data suggests that Singapore was not hit hard by the Great Resignation, it’s likely that different industries experience varying turnover rates, and the average “hides a lot of change,” he told CNBC.
Talent is in high demand in certain segments of the workforce, such as life sciences and technology, he added.
“This creates an environment in which HR functions continue to anticipate increased competition for talent and therefore take action,” he added.
Learn more about the Great Resignation
How effective are employee retention efforts? It depends, the workers told CNBC.
The senior DBS employee said the salary adjustments “have stemmed the tide of the big quit” for the bank.
“Our voluntary attrition rates in 2021 were comparable to pre-pandemic levels and were actually either on par with or below the market average in our core markets,” said Lee, group head of human resources at DBS.
An employee of SPH Media Trust, who got a 20% pay rise, said she was in no rush to look for a new job now that her salary was higher. “In that sense, it changed the perspective a bit,” she said.
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But other factors still matter.
The former lawyer who received a 40% raise said he left the practice “in search of better hours”.
The employee of a local media company who has seen more promotions in his company, whose salary has increased by about 40%, said he would always look for a new position if he wanted to advance his career. But he acknowledged that it would be more difficult to find a more attractive alternative, given his salary increase.
For Finn Partners, employee referrals have increased by 100% since referral bonuses were increased, Samian said, noting that having more candidates is important in a competitive job market.
However, aggressive wage competition may not be sustainable in the long term, Mercer’s Garrad said.
Some companies are already starting to reduce financial incentives for all but “critical” roles, he said.
Things could also take a turn as economic fears grow.
“Some are now starting to consider freezing hiring in their organization to anticipate the risk of a recession,” he said.
Ang from Kerry Consulting said it looks like the business cycle is in the middle of a recovery where businesses continue to expand and hire.
“I believe in another six to maybe potentially 12 more months, it could potentially go down a bit,” she said.
Still, the benefits that were introduced during the Covid pandemic will remain important and could become the norm, Ang said.
She also said companies that don’t offer flexible or hybrid work arrangements could lose workers or potential hires.
Benefits like mental health coverage can send a signal about company culture, and that’s part of why there’s been a growth in non-traditional benefits, Mercer’s Garrad said.
“Competition over company culture is becoming more and more common,” he said.
Clarification: This story has been updated to more accurately reflect the SPH Media Trust name.