S'pore wages to rise 4.2% this year

This will include those of lower-skilled workers, who are expected to benefit from tighter foreign worker policies.

The good news comes from most firms remaining “cautiously optimistic” about business, according to findings from the Singapore Human Resources Institute and wage consulting firm Remuneration Data Specialists (RDS).

These sentiments were reflected in moderate wage increases, bonuses and recruitment plans culled from a June poll of 147 firms, including both multinationals and small and medium-sized enterprises, from sectors such as construction and services.

In all, workers’ total incomes are projected to rise by 4.2 per cent this year. But with inflation expected to be 2 to 3 per cent, workers will see a 1.2 to 2.2 per cent increase in real wages. Next year, real wage growth will likely dip slightly, to about 1 per cent. More encouragingly, 57 per cent of those surveyed believe low-skilled workers will see an increase in wages because of tighter foreign worker policies.

But, RDS managing consultant Peter Lee added, it was worrying that only 30 per cent of firms said the reduced numbers of foreign workers would lead to companies redesigning lower-skilled jobs.

This could include, for instance, the wider use of technology so workers can be more productive and command higher pay.

“There is still a perception that we need not invest in low-skilled workers. But I think these attitudes will change as it becomes harder to hire foreign workers as substitutes,” he said.

Firms say it is inevitable that they have to pay workers more in the light of the labour crunch.

“Singaporeans will not work for too low a salary,” said Association of Small and Medium Enterprises president Chan Chong Beng. “If firms cannot afford to pay workers a decent salary, they should look at their business models again.”