HR experts recommend pay rise

SINGAPORE: Human resource practitioners have called for salary increments this year, to be built into workers' salaries.

They said such increments, instead of a one-off payment, are more sustainable to meet the rising cost of living in Singapore.

This is in line with calls by the labour movement for the National Wages Council (NWC) to propose a minimum dollar amount, as an increment to the basic pay of low-wage workers.

The council is expected to announce its annual wage recommendations later this month.

The NWC recommendations will be closely watched by the public and private sectors.

With a projected inflation rate of between 3.5 and 4.5 per cent this year, there have been concerns about its impact especially on low-wage workers.

Inflation rose to 5.2 per cent in March.

Last year, the NWC suggested bosses give a one-off lump-sum payment to help employees offset inflation.

But some observers said that may not be enough this year.

Randstad regional director Karin Clarke said: "The reason is that, in six months' time, and inflation is still high, the average worker will still be struggling to meet the rising costs.

"So I think the only way and the sustainable way is to really impact peoples' monthly salary by an on-going incremental increase.

"It's a smarter recommendation than giving a one-off band aid payment."

Workers have welcomed such a move.

One said: "Of course, progressive increments will be much better.

"You can see a longer income difference, but if you give a one-time [increment], you can't see much right?"

While such increments will raise business costs, HR experts said there is still some room for companies to absorb wage increases.

Hays Singapore general manager Chris Mead said: "Certainly, whenever organisations face wage increase pressures, that is a challenge for business.

"However, the solution is to focus on retaining good staff and then on productivity.

"secondly, it is to reward staff on performance-based pay over and above their base salary. So for staff who over perform in their duties, they can have a bonus or a reward for that and then, the company wins as well because they've raised productivity."

Experts agree that is key to any real-wage growth.

Ms Karin said: "At the end of the day, Singapore is moving towards higher productivity and we have to drive productivity.

"Wage increases has to be something that contributes to productivity.

"But we're in a very high inflationary environment and if we don't address the inflationary environment, what we may see is more people exiting the Singapore market and that will not help Singapore in an uncertain time."

Industry players said being able to offer increments to retain staff can contribute to a company's employment branding and make them more attractive for job seekers.

Last year, the NWC recommended that workers be given higher wage increases.

Then, it was an easy call to make, given the buoyant economy in 2010.

So, it will be interesting to see what kind of recommendations the NWC will make this time, given the outlook, for the economy this year is still very uncertain.