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AsiaOne
28-05-2025
- Business
- AsiaOne
More firms raise salaries in 2024 than in 2023, Singapore News
More firms increased their employees' wages in 2024, compared to the year before, said the Ministry of Manpower (MOM) in a report on Wednesday (May 28). The proportion of firms that raised employees' wages increased to 78.3 per cent in 2024, up from 65.6 per cent in 2023, according to MOM's report on wage practices for 2024. Concurrently, the proportion of firms that cut employees' pay fell from from 6.5 per cent in 2023 to 3.2 per cent in 2024. The remaining 18.5 per cent of firms kept the wages of their employees constant. Average wage increase has moderated: MOM Among firms which raised wages, the average wage increase in 2024 of 6.6 per cent has moderated from 7.2 per cent 2023. However, among firms which reduced wages, the cut was smaller in 2024 (-3.6 per cent) than in 2023 (-6.2 per cent). As economic growth continued and employers' profits went up, nominal total wages (which includes employer CPF contributions, basic wage and an annual variable component to account for bonuses) grew by 5.6 per cent in 2024 — comparable to 5.2 per cent in 2023. Since nominal wage growth outpaced inflation, which has eased since 2023, real wage growth rose to 3.2 per cent 2024, from 0.4 per cent the year before. Ang Boon Heng, director of MOM's manpower research and statistics department, said on Wednesday that the changes in Singapore's inflation rate "definitely played a very big part" in real wage growth. He added that 2024 saw the highest real wage growth since the Covid-19 pandemic, when Singapore's core inflation reached a high of 4.1 per cent. Over the medium-term, real wage growth continues to be supported by real productivity growth, said MOM. Wage growth varies by industry The ministry added that while wage growth was observed across across the board, it varied based on the industry. Administrative and support services reported the highest growth at 8.7 per cent, which MOM attributed largely to the Progressive Wage Model (PWM) introduced last year. Above-average wage increases were seen in financial services as well as community, social and personal services amid continued demand for skilled workers. Food and beverage services, however, recorded below-average wage growth at 4.8 per cent, while wage increases in wholesale trade (4.2 per cent) and manufacturing (5.1 per cent) were also below average. Wages in the latter two industries are expected to moderate in the coming year, in view of the on-going geopolitical and trade tensions due to the tariffs imposed by US President Donald Trump. Overall, rank-and-file as well as junior management employees saw slightly higher wage growth at 5.8 per cent and 5.6 per cent respectively, compared to senior management at 5.1 per cent. This is partly due to efforts to offset cost-of-living pressures, said MOM. It added that government policies, such as increases in the local qualifying salary and the implementation of PWM initiatives, have contributed to the uplift in wages of lower-income employees. The local qualifying salary refers to the minimum wage firms must pay local employees when they hire foreign employees. It was raised from $1,400 to $1,600 per month since July 1, 2024. [[nid:714094]]
Business Times
28-05-2025
- Business
- Business Times
Singapore's real wages rise at faster rate of 3.2% in 2024; more firms give salary bumps: MOM
[SINGAPORE] Real wage growth in Singapore rose at a faster pace of 3.2 per cent in 2024 as nominal wage growth outpaced inflation, data from the Ministry of Manpower (MOM) showed on Wednesday (May 28). Lower headline inflation of 2.4 per cent in 2024, compared with 4.8 per cent in 2023, meant that 2024's real wage growth was higher than the 0.4 per cent recorded the year before and the highest since Covid-19, stated the ministry's latest wage practices report. This was while the proportion of firms that gave wage increases to their staff rose in 2024, even though the proportion of profitable businesses declined slightly from the year before. Nominal wages of full-time resident employees who had been with the same employer for at least a year increased 5.6 per cent. This figure included employer Central Provident Fund (CPF) contributions. This was a nudge higher than the 5.2 per cent nominal wage growth seen in 2023. 'Looking ahead, we expect wage growth this year to moderate,' said Ang Boon Heng, director of MOM's manpower research and statistics department, in a briefing for reporters. 'It's not going to be news because we know that times are uncertain.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Even though there has been a slight improvement in Singapore's growth outlook in recent weeks, due to de-escalation of US-China trade tariffs, MOM still expects wage growth to moderate in 2025, added Ang. Nominal wage growth is expected to moderate, especially in trade-reliant sectors such as manufacturing and wholesale trade, the ministry said in its annual report. Still, the moderation in wage growth is not expected to be significant, noted Ang, given that the labour market remains tight, as well as with strong labour demand in certain sectors, such as consulting, and health and social services. The ministry's forward-looking survey, conducted in the first quarter of 2025, showed that a smaller proportion of firms plan to give wage increases to their employees. Rank-and-file employees (5.8 per cent) and junior management (5.6 per cent) had slightly higher wage increases than senior management (5.1 per cent), partly reflecting efforts to offset cost-of-living pressures, said MOM. It added that policy factors, such as increases in the local qualifying salary and the implementation of Progressive Wage Model initiatives, contributed to the uplift in wages of lower-income employees. 'The increase in wages of lower-income employees did not have a significant impact on cost competitiveness, as they only form a very small component of total business costs,' said MOM. Sectoral wages In 2024, all industries continued to experience wage growth, though the rate of increase across sectors varied, MOM said. The financial services (6.7 per cent) and community, social and personal services (5.7 per cent) sectors had above-average wage gains as demand for skilled workers continued. Meanwhile, the administrative and support services had the highest wage growth of 8.7 per cent, reflecting the impact of the Progressive Wage Model, said MOM. In contrast, the food and beverage (4.8 per cent), wholesale trade (4.2 per cent) and manufacturing (5.1 per cent) sectors had below-average wage growth. Wage increases in the latter two sectors are expected to moderate this year given ongoing geopolitical and trade tensions. In 2024, the proportion of firms that raised their staff's salaries rose to 78.3 per cent, from 65.6 per cent the year prior. MOM noted, however, that this was due to firms' past organisational performance, rather than forward-looking confidence. Meanwhile, the proportion of businesses that reported they were profitable dipped to 80.8 per cent, from 82.1 per cent previously. Profitability varied across industries, with the real estate services and wholesale trade sectors seeing fewer profitable businesses. In contrast, manufacturing had an increase in profitable firms, but this is expected to decline in the coming year due to global trade tensions. Firms that cut wages remained in the minority at 3.2 per cent, while 18.5 per cent of businesses left salaries unchanged. Flexible-wage system Over the past decade, there has been a gradual decline in the proportion of companies which has implemented at least one flexible-wage system, said MOM. This refers to either the monthly variable component and the annual variable component, or both. Only 8.5 per cent of firms have adopted both systems, while the prevalence of variable wages in the private sector firms was also low at 14.9 per cent. 'Establishments that have implemented at least one flexible-wage system component were more likely to have given wage increases by using the variable wage components,' said MOM. A majority of companies adopt the annual variable component, the ministry noted. Firms are also not adopting the monthly variable component, either due to a lack of awareness or because other firms in their industries do not have a practice of adopting it in their wage structure.
