Each year, the Ministry of Manpower (MOM) releases a Report on Wage Practices, which provides a broad overview on salary trends and practices for full-time employees in continuous employment with the same employer for at least a year.
This report was released at the end of June 2024, and here are 6 salary growth trends in Singapore that we learned from reading the report.
#1 More Than 82% Of Establishments Reported A Profit In 2023
On the back of slower economic growth, 1.1% in 2023 compared to 3.8% in 2022, more establishments reported that they were less profitable.
In 2023, 82.1% of establishments reported a profit – this was slightly lower than the 83.9% that reported a profit in 2022. Nevertheless, looking at the overall trend, the current proportion of profitable establishments are higher than during the years leading up to COVID-19 pandemic.
Even among firms that reported a profit, a higher proportion did not do as well as the previous year.
#2 Salaries Grew 5.2% In 2023
With Singapore’s labour market continuing to remain tight, nominal total wages, including both basic wages and annual variable component, grew 5.2% in 2023.
While this was lower than the 6.5% nominal wage growth in 2022, it continued to outpace inflation – with real wages growing 0.4% in 2023.
#3 A Majority Of Employers Gave A Salary Raise To Workers In 2023
In 2023, 65.6% of establishments gave their employees a salary raise. However, this was lower compared to 2022 – where 72.2% of employers increased their employees’ wages.
Again reflecting the slowing economy, a slightly higher proportion of employers cut wages in 2023 (6.5%), compared to 2022 (5.2%)
#4 Lower-Paid Employees Got Bigger Raises In 2023
Rank-and-File employees saw their wages grow 4.8% in 2023, while employees in Junior Management received 6.3% wage growth. In contrast, Senior Management received a 4.6% wage growth.
On average, all three employee categories saw their wages grow by a smaller amount in 2023 compared to 2022. Last year, Rank-and-File employees received a raise of 5.8% and Junior Management employees saw wages grow 7.4%. Similarly, Senior Management employees’ wage growth also slowed from a hike of 6.7% in 2022.
The Report also noted that low-income employees will likely continue to grow in 2024 alongside the increase in Local Qualifying Salary (LQS) from $1,400 to $1,600 in 2024.
Read Also: Local Qualifying Salary: 5 Things You Need To Know About LQS
#5 Wages Continue To Grow Across All Industries In Singapore
While employees in all industries continued to enjoy wage growth, the magnitude of growth was broadly lower compared to 2022.
The only exception was in the Administrative & Support Services industry – where employees enjoyed a wage growth of 7.1% in 2023 compared to 5.2% in 2022. The report highlighted this as an outcome of the Porgressive Wage Model (PWM).
Read Also: Progressive Wage Model: How Much Will Singapore Employers Have To Pay Their Workers
On the other hand, employees in the Accommodation, Real Estate Services, Financial Services, Administrative & Support Services got the biggest wage raises in 2023.
#6 Only 10% Of Employers Have Fully Adopted Flexible Wage System (FWS)
80.4% of employers have implemented some of Flexible Wage System in 2023. This is just marginally smaller than last year – when 80.6% of employers implemented some of FWS.
However, looking at the implementation of FWS broadly, the report noted that full adoption, including both a Monthly Variable Component and Annual Variable Component) remained low at about 10%.
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