Towards the end of every year, we start seeing many more news reports on how much we can expect in salary increments in the upcoming year.
Compared to our regional peers working in Hong Kong, Japan and Australia, this ranks among the best increments. Our counterparts working in emerging Asian economies such as Bangladesh, India, Vietnam, Indonesia, Thailand and China are expected to receive even bigger pay raises in general.
While this is certainly good news for workers in Singapore, it should not fuel our hopes and expectations as we go into our annual year-end review meetings with our bosses or managers. The main focus of these reviews should still focus on our performance and skills rather than how much more the company is going to pay us in 2019.
With this in mind, here are five good reasons why we may not get the pay raise we were hoping for, but should still be equally motivated to produce better results in our respective job roles.
# 1 Expectations Didn’t Tally With Reality In 2018, So Why Should It Be Different In 2019?
At the tail end of 2017, we wrote a similar article highlighting the fact that ECA International and Mercer forecasted Singapore workers to earn between 3.9% and 4.0% more in 2018.
The verdict was out in December 2018 – the Ministry of Manpower (MOM) issued its report stating that median salaries grew to $4,437 in 2018. This is a 4.8% increase on median wages in 2017, or nearly 23% higher than what the human resource consulting companies had forecasted.
The point we’re trying to make here is that pay raises in 2018 didn’t match what was forecasted by these companies. It was a good problem in a sense that median wages overshot the forecast.
In 2019, if your wage, or median wages in general, grows by less than the forecast, we should not be too surprised or upset.
# 2 Not All Sectors Will Perform Equally Well/Poorly
Within the salary trends forecast released by ECA International and Mercer, it was mentioned that the Singapore economy is expected to continue doing well in 2019.
Sectors such as the life sciences and technology should propel Singapore’s economy in the coming year. Apart from these two broad sectors, those working in sales, engineering, legal, finance and research functions will likely see bigger pay hikes on the back of more demand for such skills, especially within the in-demand sectors. On the flipside, the real estate, banking and retail sectors were flagged as potentially lagging other sectors.
We have to read the whole report rather than just take the sensational numbers. If we are working in sectors that have been identified as the frontrunners for Singapore’s economy in 2019, it is likely that we will get the forecasted pay raise, or even better. In the same vein, we should not be disappointed if we are working in sectors that have been identified to perform less well in 2019.
On the whole, sectors may be cyclical, with some performing better in certain years and less well in other years. If our sector has performed well in the last 10 years, but is undergoing some structural reforms recently, we should not fret over not getting the pay raise that is forecasted in 2019.
On the other hand, if we foresee that our company or industry will contract in the foreseeable future, then we have bigger fish to fry – being worried about our job security or getting another job in a more lucrative sector, rather than fixate on our pay raise in 2019.
# 3 Real Wages VS Nominal Wages
In the report, it was also highlighted that real wages will only go up by 2.6% given that inflation is forecasted to rise by a bigger margin in 2019 than in 2018.
To explain this point in a simplistic manner, it really doesn’t matter how much our wages go up by in nominal terms. If inflation goes up by a higher percentage, we will not experience any benefits. In fact, we will be worse off.
This means we should not just look at our wage hikes to determine if we are really better off. Other economic indicators are just as important. Inflation rates give us a sense of how much better off we actually are with our pay raises, while GDP figures may give us an insight into the health of our country in the longer term.
# 4 Your Company Performance
For company to give out healthy pay raises, they would need to be doing well themselves. Even if your company is operating within one of the sectors that is forecasted to be performing well, it may not reap the benefits if it is restructuring or badly managed.
In the first scenario, we have to “give-and-take”. When our company is trying to restructure to remain competitive, we should lend our support to ensure it is able to successfully progress. This may mean giving up one or several years of wage increments. If we believe in the firm, the short-term salary hikes should not matter as much as the long-term vision we have in the company.
Of course, the other scenario is that we think the company is badly managed. This should raise alarm bells even if you receive a good wage increment. In this case, we should start thinking of the long-term sustainability of the company rather than be contented to stay just because of a pay raise as our job may not be around in the next few months or years.
# 5 Your Performance
Another reason you may not receive the forecasted pay hike or the pay hike that you want, is because you haven’t progressed as an employee. Your individual performance is one of the biggest determinants of the wage hikes you will get over the course of your career.
Even in a company that is performing badly during the year will give its best employees (especially the ones it wants to keep) a generous pay hike. In contrast, a good performing company would give its poorest performing members a meagre salary raise as they would not mind it too much if those employees left.
The key is ensuring you are contributing to your company and focusing on upgrading your skillset rather than just hoping for a pay hike out of thin air or on the performance of your colleagues.
Focus Less On Wage Forecasts And More On Your Development
We’re not trying to say that these wage forecasts are useless. They can serve as a benchmark for how much we can receive in 2019. If we do not get the forecasted pay hike, we can gauge how well (or poorly) we may be performing compared to our peers.
If we get more, we know we’ve probably done a good job and our managers have noticed that. This also tells us that we’ve been doing the right things, and should continue working hard in improving those areas.
Similarly, if we get less, we can take it as an indicator that we may be falling short of expectations at our firm and try to understand how to improve. Of course, it could also be that we are working for poor employers, and leaving may be the only way to get what we deserve. However, we should carefully consider if this is really the case.
At the end of the day, our career is a marathon rather than a sprint. Being a great employee is one of the only ways we can ensure that we will always have employments and be well remunerated.
If you are a Singaporean who is looking for a job but is unable to find one, Workforce Singapore can help connect you a to job you are looking for. To get started, you can make an appointment with Workforce Singapore here. Someone from the organisation will give you a call to arrange to meet up, and to link you up with the right companies and schemes that you are suitable for.
Need A Loan For Your Expanding Business?
Find financing solutions for your business needs through OCBC Business Banking today.
Join The DollarsAndSense Business Community
For more content that helps entrepreneurs, freelancers, and self-employed individuals and learn to build better businesses, join the DollarsAndSense Business Community on Facebook.