Singapore's real wage growth could reach 4.7% in 2017: study

The median base salary movement is forecast to be at 4%.

A forecast issued by the Hay Group division of Korn Ferry reveals that, adjusted for inflation, workers around Asia are expected to see real wage increases of 4.3% - the highest globally.

Singapore's projected real wage growth is higher at 4.7%. The largest real wage increases are forecast in Vietnam (7.2%), Thailand (5.6%), Indonesia (4.9%) and India (4.8%).

The median base salary movement in Singapore is forecast to be at 4% in 2017. Inflation for this year will be at -0.7%, therefore driving the real salary growth (forecast) to be at 4.7% as compared to 3.7% in 2016. Singapore’s economy in 2017 is projected to be sluggish with most companies expecting only modest growth.

Despite the negative outlook for next year, the study said that recent market reward survey of over 400 companies reveals that more than three-quarters of employers in Singapore are still likely to implement salary increment to their employees.

“With the tightening of foreign labour policies and a lack of expertise at junior to middle levels to fill mission critical and crucial roles, the focus for most employers in 2017 is likely to be talent retention as Singapore continues to face a talent crunch,” said Stephen Choo, ‎Senior Client Partner and Country Head of Global Productized Services at Korn Ferry Hay Group Singapore. “In this climate of slow economic growth, apart from wage increase, companies should also explore other creative ways to retain their talent. These could include providing corporate concierge services, giving access to life coaches or even allowing employees to bring their pets to work. By providing an engaging and supportive work environment it can help take the pressure off pay and sustain organisational commitment.”

The biggest change in Asia is in China, where real wages increases are down nearly 2.5%, from 6.3% in 2016 to 4% in 2017 – reflecting lower growth predictions for the year ahead.