Fewer workers received pay hikes last year as firms turn unprofitable

One in 4 companies incurred losses in the past year.

The latest report on wage practices by the Ministry of Manpower revealed that the proportion of profitable private firms declined in the past year, from 79% in 2015 to 76%.

This came after more firms incurred losses, with 24% saying so.

The slump in the profitability of firms may have led to the easing in the total wage growth of private sector employees. According to the study, wages grew at a slower pace of 3.1% in 2016, compared with the 4.9% increase in 2015. This reflected a moderation in basic wage growth from 4.2% in 2015 to 3.5% in 2016. Bonus payouts remained similar at 2.16 months of basic wage.

Meanwhile, only 58% of firms raised total wages in the past year, down from 64% doing so in 2015. Around 17% of the firms resorted to cutting total wage whilst 1 in 4 kept wages unchanged. This resulted in lower proportion of employees receiving a pay hike at 75%, down from 77% seen in 2015.