Business Times - 28 Apr 2009
Poll shows employers trimming budgets for 2009 increments to median 3% here.
Pay hikes across the Asia-Pacific region, especially for employees of multinational corporations, are set to fall to a five-year low, with increases in Singapore likely to be among the region's lowest, according to HRBS Asia.
A poll taken here by the human resource consultancy in January-February indicated that employers in Singapore have trimmed their budgets for 2009 salary increments to a median 3 per cent, down from 4.3 per cent last November.
Salaries in Asia-Pacific as a whole are tipped to grow by a median 5 per cent, inflated though by employers in Vietnam and India who allocated for 10 per cent raises. This compares with the region-wide 5.8 per cent pay hike in 2003, when the Sars epidemic sank most economies across Asia.
Among companies that have already handed out the pay raise for 2009, the actual increases were far lower than what were budgeted, according to Elaine Ng, managing principal and director of HRBS Asia. The median pay hike in nine of the 19 countriesÃ‚Â is zero.
'In most cases, the actual increase implemented in the first two months of 2009 is far below the pay increase during the Sars time,' she says.
While the projected median salary hike in Singapore is 3 per cent, the average salary increase is expected to be only 2.3 per cent, says Ms Ng.
The average actual (those already made) and budgeted pay increases combined is even lower: 1.3 per cent.
'One reason behind this phenomenon is that companies are worried about their business in the months ahead as the economic environment is uncertain and can worsen,' Ms Ng says.
'Companies tend to adjust their actual pay increase figures downwards rather than stick to the budgeted.'
As more and more companies finalise their pay increases in the coming months, a lower pay rise or even pay freeze is likely.
An average 31 per cent of the nearly 1,020 companies polled in 19 Asian countries - most of which were MNCs - plan to freeze pay in 2009. In Singapore, where 89 companies were polled, the proportion is 36 per cent.
Salary cuts - in particular, for MNC employees - are likely to be exceptions. 'While MNCs' businesses may be affected by the downturn, nonetheless, Asia is the growth region still for these firms and they are not buffeted by the financial crisis to the extent of the banking industry,' says Ms Ng.
'Given the huge shortage of skilled and specialised people resources faced by employers just before the economic downturn that hit the majority of businesses in the last quarter of 2008, most employers are especially wary of losing their high-skilled, highly- trained professionals and specialists,' she says.
Pay cuts drain morale, Ms Ng says, and employers with excess manpower would rather put in place 'less work, less pay' programmes.