Salary raise for new hires to climb 5-10% in 2020

Companies are expected to be less receptive to salary negotiation.

Employers in Singapore may likely offer only a slight salary raise of 5-10% for new hires in 2020, tightening their salary budgets as its justifications on the returns play a bigger part in companies’ decision-making, according to a Randstad report.

Internal salary increments have been observed to be kept at a minimum, usually just as much as covering the prevailing inflation rate. Firms are also expected to be less receptive to salary negotiation efforts.

“This more conservative approach to hiring and compensation comes as many companies realise that costs are increasing disproportionately to revenue growth,” the report noted.

Further, in some rare cases where firms are under extreme cost pressures, they may even consider a salary cut for new hires.

Hiring of replacement headcount as companies lose employees is also expected to slow down, with functions and roles being absorbed into existing teams instead, partly to keep manpower costs low.

For Singaporean candidates, they could become more concerned about job security and an organisation’s financial stability, although they can still be lured by factors like growth opportunities and better compensation packages.

A shift to a larger contingent workforce is also expected to continue in 2020, as organisations deal with cost pressures, organisational change, restructuring and digitalisation. Younger workers have also been observed to be more attracted to an early career in contracting.

“Besides allowing them to build an impressive portfolio of acquired technical and soft skills, contracting also gives them the flexibility and freedom to pursue personal goals such as longer travel plans, side hustles and other personal aspirations,” the report added.