MOM recently released its Report on Wage Practices 2022, which painted a generally positive picture of Singapore’s jobs market. In particular, we learned that Singapore employees enjoyed the highest wage growth in over than a decade – earning 6.5% more in 2022.
While this is definitely a positive, for both employees and the state of businesses in Singapore – here’s what else the statistics in the Report on Wage Practices 2022 are telling us about the local jobs market.
Real Wage Growth Actually Came Down
While nominal wages rose at the highest rate in more than a decade, real wage growth took a hit due to inflation. Nevertheless, it is still a positive that wages grew by more than the inflation rate.
Real wages only grew at 0.4% in 2022 – the lowest rate in a decade.
Highest Rate Of Businesses Earning A Profit In A Decade
Close to 83.9% of businesses were profitable in 2022. This last time it was higher was in 2013 – when 84% of businesses in Singapore were profitable.
As we can also see in the chart below, the rate of businesses earning a profit has also sharply increased since the COVID-19 pandemic.
72% Businesses Gave Increments. But 82% of Employees Enjoyed Wage Increments
In 2022, 72.2% of business gave out raises. Not only is this higher than in 2021, but also, less fewer businesses cut wages in 2022.
Even more positive is that a higher proportion of employees – 81.7% – enjoyed a wage increase in 2022. Looking at 2021, we can also see that a higher percentage of employees enjoyed a pay raise compared to the percentage of firm that paid an increment.
From this, we can infer that bigger firms may be more generous with paying raises in the past two years.
Not Only That, Bigger Firms Also Paid Bigger Raises
The report also detailed that bigger businesses gave their employees a higher wage increment in 2022. Establishments that hired 200 & Over employees paid their employees 7.2% more in 2022.
Larger Businesses More Likely To Be Profitable
The larger the business, the more likely they were to be profitable. Intuitively, this also makes it logical that employees working in larger firms got a bigger pay hike in 2022.
Even Loss-Making Firms Paid Most Of Their Employees Higher Wages
Close to 65% of employees working in a business that incurred a loss still received a wage increment in 2022. Quite logically, businesses that did better also paid more of their employees a higher wage.
We can also see that at all levels of profitability, firms still cut some of their employees’ wages. This tell us that it cannot be taken for granted that a profitable firm has to give their employees a higher pay.
Rank-And-File Employees Got Poorest Wage Increments
The report also highlighted that management teams received bigger wage hikes compared to rank-and-file employees. Interestingly, junior management got the biggest wage hike.
All Sectors Paid Out Higher Wages
On average, employees from all sectors received wage increments. The biggest wage increments for employees were in the Accommodation, Financial Services and Real Estate Services.
While the sectors that gave out the poorest increments include Administrative and Support Services, Food & Beverage and Manufacturing.
Firms To Be More Cautious In 2023
The report’s conclusion stated that while more firms intend to give their employees a raise in 2023, the uncertain economic business environment is likely to result in a more cautious stance.
As such, wage growth is expected to moderate in 2023.
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