Companies fight for talent in tight labor market
Singaporean companies adjust their salary levels and increase mental health benefits. They also offer bonuses and other flexible working options.
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Lawyers at the top four law firms in Singapore could see an average annual increase of 10% to 15% over a typical year.
The company said employees would get a larger increment this year, one former employee told CNBC. His salary jumped by 40% and the increase was not tied to a promotion, the person said.
This law firm is not the only one in Singapore that adjusts compensation packages for hot labor markets.
Southeast Asia’s biggest lender DBSCNBC was informed that the bank had increased its salaries in 2021. KPMG accounting firm announced May that the firm will spend 25 million Singapore dollars ($18.23 million) on salary increments.
Singapore Press Holdings Media Trust is a publisher of news and media. It recently completed a salary review in order to align remuneration with market standards.
The average increments were significantly higher than last year and employers are willing to pay a premium in order to retain and attract workers, particularly if there is a shortage of talent within an industry. Cynthia Ang, executive director of Kerry Consulting, stated that this has been evident.
Singaporean companies also make adjustments to their employee benefits, such as mental health support and bonuses.
“The Singapore labor market is definitely moving towards, or has been looking at tangible aspects of the deal — pay and benefits — as a major competitive battleground,” said Lewis Garrad, Mercer’s Singapore career business leader.
Mercer surveyed 270 businesses and found that 60% had reviewed their benefit plans for 2021. This is a significant increase from the 10% to 15% rate in previous years. Garrad stated that this is at least partly due to the tight labor market.
Prudential Singapore offered each employee $1,000 worth shares in October 2021. Neetha, who leads a group that prepares for the future, stated the news. According to her, some workers were given credit cards that could be used for co-working spaces bookings as part of the hybrid work initiative.
Randstad Singapore started allowing its employees to work from home for up to 4 weeks per year in February. Daljit Sall is the general manager of technology at Randstad Singapore.
A local employee, who was not allowed to talk to media but declined to identify himself, stated that more people were promoted this year than previous years.
He said that there’s a limit to the number of people, and this time, they seemed to want to encourage all those who were deserving.
Finn Partners employees can refer a new employee to the agency and receive SG$5,000 each in two separate payouts if they stay with Finn Partners at least for one year. Safina Samian is a partner at this communications agency. The bonus is now SG$1,000.
Samian explained that Finn Partners provides its employees with four days of mental wellness leave as well as a $100 annual allowance to subscribe to a Wellness App subscription and half-day off every Friday.
“We are seeing a wider range of well-being and wellness benefits,” stated Ang, Kerry Consulting. He cited self-care and non-meeting days.
Some businesses claimed that the increased benefits were part of broader talent retention strategies to combat the Great Resignation. This global trend is being addressed by many companies.
DBS’s senior staffer requested anonymity to avoid being identified because he could not speak with the media. He said that salaries were adjusted to boost morale, and so that “we don’t lose in the current talent battle that you see here in Singapore.”
Lee Yan Hong (head of group human resources) at the bank confirmed that the increments in pay were “to ensure our employees continue being paid competitively to the marketplace.”
SPH Media Trust spokesmen said they raised the salaries in order to remain competitive when recruiting and keeping talent.
Sallof Randstad Singapore claimed that Randstad’s remote-work program has been well-received by employees and minimizes the need for them to search for other jobs.
However, not every company explained why they made the changes.
CNBC was told by the legal professional that he received a 40 percent increment. The law firm said only it was doing a pay review.
His speculation was supported by evidence, however, stating that he believed they were trying to attract more salaries than what international companies are charging.
The legal industry saw a record 538 lawyers leave the profession in 2021 — a 30% increase from the previous year, Singapore’s Law Society President Adrian Tan said in January.
The backdrop for the recent review of benefits and salaries is a highly competitive Singapore job market, regardless of whether companies provide reasons.
Garrad of Mercer said, “We’re in an extremely tight labor market.” He said that Singapore relies on foreign talent in its history, which Covid-19 has made difficult for Singapore to hire such people over the past 2 years.
While official data suggests Singapore has not been hit hard by the Great Resignation,He said that it is likely different industries experience varying turnover rates. The average rate “hides a lot” and CNBC was probably to blame.
According to him, talent is high-demand in some sectors of the workforce like tech and life sciences.
“That environment allows HR to continue to forecast increased talent competition and take actions,” he said.
Learn more about The Great Resignation
What is the effectiveness of employee retention strategies? CNBC workers said it depends.
Senior DBS employees stated that pay increases “stemmed a tide of Great Resignation for the bank.”
Lee, DBS’ head of group human resource, stated that 2021 voluntary attrition rates were similar to those in the pre-pandemic period and in fact were either equal or lower than our market averages in our core markets.
SPH Media Trust employees who were awarded a 20 percent pay increase said they aren’t in hurry to search for new jobs now that their salaries have increased. She said that the pay increase did shift her perspective in that way.
Video call with a businessman from his home
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However, other factors also matter.
A former lawyer, who was awarded a 40 percent increment in his salary, said that he quit law to “search for better hours.”
A local employee who noticed more promotions at his company, and whose salaries have increased by approximately 40%, stated that he still wants to find a new job, but would not rule out other opportunities if he wanted to progress his career. However, he admitted that it would be difficult for him to find a better job because of his higher pay.
Samian stated that Finn Partners has seen an increase in employee referrals of 100% after the increased referral bonuses. He also noted that there is a need to attract more qualified candidates into a highly competitive market.
Garrad, Mercer, stated that it may not be financially sustainable to compete aggressively for pay in the long term.
He said that some companies have already begun to withdraw financial incentives from all roles other than those considered mission critical.
As economic worries rise, things could change.
“Some people are starting to consider hiring freezes within their organizations to avoid recession risk,” said he.
Kerry Consulting’s Ang believes that companies are expanding and still hiring, which suggests an economic upswing.
“I think in another six to perhaps potentially twelve months, this might possibly taper a bit,” she stated.
Ang indicated that benefits from the Covid epidemic will still be important.
Additionally, she said that companies who don’t offer flexible and hybrid work options could be losing workers or hiring candidates.
Benefits like mental health coverage are a sign of a company’s culture. That’s why Garrad from Mercer says there have been increases in other benefits.
He said, “Competing in company culture is more common.”