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Total wage growth remains robust in 2022 amid heightened demand for staff

Wage growth soars in Singapore

A recent report from the Ministry of Manpower’s Research and Statistics Department revealed that more firms in Singapore were able to raise their employees’ wages in 2022 compared to the previous year. The report highlighted that nominal wage growth in 2022 reached its highest level in a decade.

Despite the challenges posed by higher inflation, real wages continued to grow, albeit at a slower pace compared to 2021. The data indicated a robust wage growth pattern in the face of increased manpower demand.

The report outlined that nominal total wages, which included employer CPF (pension) contributions, for full-time resident employees (Singapore Citizens and Permanent Residents) who had been with the same employer for at least one year, rose by 6.5% in 2022.

Moreover, the Ministry of Manpower’s findings demonstrated that the nominal wage increase in 2022 was significantly higher than in the previous year, recording a 3.9% increase. This upward trend reflected firms’ efforts to restore the wages of employees who experienced cuts during the pandemic years. Additionally, companies granted higher wage increases to retain staff amidst the intensifying competition for workers.

While nominal wage growth managed to keep pace with inflation, resulting in real wage growth, the rate of growth was notably dampened. Real wages experienced a marginal increase of 0.4% in 2022, falling below the 1.6% growth witnessed in 2021. The report attributed this slower growth to the considerably higher inflation rate in 2022 (6.1%) compared to the previous year (2.3%).

Notably, all industries in Singapore observed higher wage growth in 2022 compared to 2021, although the extent of the increase varied across sectors. Accommodation and Retail Trade reported above-average wage increases of 9.7% and 6.7% respectively. These industries raised wages to attract and retain workers amidst a strong recovery in tourism demand.

The Financial Services (9.0%), Information & Communications (7.7%), and Professional Services (7.6%) sectors continued to experience robust wage growth in 2022, driven by sustained manpower demand.

Meanwhile, Manufacturing (5.7%) and Wholesale Trade (5.8%) firms also increased employee wages, although to a lesser extent due to global supply chain disruptions and weakness in trade-related activities.

The report further highlighted an encouraging trend, as the proportion of profitable establishments rose for the second consecutive year, reaching 83.9% in 2022. Consequently, the percentage of establishments that offered wage increases increased from 60.0% in 2021 to 72.2% in 2022, surpassing the pre-pandemic level in 2019 (69.2%).

The number of establishments that reduced employee wages remained relatively low at 5.2%, while the remaining 22.6% maintained wages unchanged.

Among establishments that provided wage increases, the magnitude of the increase was larger in 2022 (7.9%) compared to the previous year (6.3%). Conversely, establishments that implemented wage cuts saw a smaller magnitude of reduction compared to the previous year, with the figure decreasing from -5.2% to -4.5%.

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3 major changes to employment law HR managers must prep for

New Acts to take effect in 2024 

A wave of legislative changes swept through the realm of employment law, as three pivotal bills were granted royal assent, poised to revolutionise HR practices and empower working parents. The Carer’s Leave Act, Neonatal Care (Leave and Pay) Act, and Protection from Redundancy (Pregnancy and Family Leave) Act are slated to take effect in 2024. 

These forthcoming laws demand early preparation from employers in England, Scotland, and Wales, as they bring profound transformations to the landscape of employment. Kate Palmer, HR Advice & Consultancy Director at Peninsula, delves into the imminent changes and their implications for businesses: 

  1. The Carer’s Leave Act: This legislation introduces a groundbreaking entitlement of one week’s unpaid leave per year for employees responsible for the care of dependents with long-term care needs. From the very first day of employment, eligible employees can exercise this right without the need for extensive evidence, only requiring self-certification. This leave can be utilised for various forms of caregiving, ranging from accompanying individuals to medical appointments to offering financial assistance. While there are no limitations on how the leave can be employed, the customary criteria for defining “dependents” will still apply. The purpose of this law is to streamline the process for both businesses and employees, fostering a more seamless experience.

  2. The Neonatal Care (Leave and Pay) Act: Under this legislation, parents of babies admitted to the hospital within the first 28 days of their lives will enjoy Neonatal Leave and Pay if the hospital stay surpasses seven consecutive days. A maximum of 12 weeks of leave can be availed, to be taken as a continuous block at the culmination of maternity or paternity leave. The government is yet to finalise the intricacies of how this new entitlement will interact with shared parental leave. Neonatal pay, which is subject to 26 weeks of service and surpassing the lower earnings limit (currently set at £123 per week), will be provided by statute. While a notice will be required, informal short notices will be permissible for leaves initiated soon after hospital admission. In cases where the leave begins before recent admission, one week’s notice will be anticipated.
  3. The Protection from Redundancy (Pregnancy and Family Leave) Act: This act amplifies the current safeguards extended to employees on maternity leave during redundancy scenarios. Presently, when companies face redundancy situations, they are obliged to offer suitable alternative positions to employees on maternity leave, provided one exists. With the introduction of this act, the same protection will be accorded to individuals on adoption or shared parental leave. Furthermore, the safeguarding will commence from the moment an employee informs their employer of their pregnancy, be it verbally or in writing, and endure for 18 months following the birth. 

“Regulations pertaining to each of these laws will be issued prior to their implementation. Though this is expected to occur next year, it is imperative for businesses to begin preparing now. These changes are momentous, necessitating employers to familiarise themselves with the intricacies, effectively communicate the information to their employees regarding their impending rights, and establish processes to ensure compliance once the laws take effect,” advises Kate Palmer. 

 “Should eligible employees find themselves deprived of the rights enshrined in these new laws, they will have the option to file claims with the employment tribunal. Similarly, if an employee faces discrimination or dismissal due to availing leave granted by these new laws, they may also pursue legal recourse,” she further clarifies. 

 

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Tech salaries show growth and resilience despite troubles facing sector

Green shoots of recovery offer hope to tech industry

Tech workers have seen maximum salaries climb by as much as 30% since last year, in early signs that the sector is bouncing back from the challenges it has faced since the start of 2022; including major layoffs across high-profile firms such as; Google, Amazon, Microsoft, Yahoo, Meta, Linkedin, Twitter, Zoom and Salesforce.

Data comes from the latest Salary Guide from Aspire, a recruitment agency specialising in the technology and digital sector. The guide benchmarks salary growth across a range of job roles, based on vacancies registered with Aspire between April 2022 and April 2023.

Increases are as high as 30% for Junior-Mid Quality Assurance (QA) Engineers, whose maximum earnings have jumped from £35,000 to £50,000. At the entry-level, Graduate Data Analysts have also seen their maximum salaries increase by 7% from £28,000 to £30,000.

The tech industry has been hit hard in the last 18 months by the economic downturn, with massive layoffs and hiring freezes. Just one role out of 15 analysed has experienced a salary decrease compared to the previous year. Mid-level User Experience (UX) and User Interface (UI) designers have seen their maximum earning potential fall by 10%, from £55,000 to £50,000, though Junior Designers have seen salaries increase by 13%.

The minimum earnings for Chief Technical Officers (CTOs) have jumped from £80,000 in 2022 to £150,000, increasing by 87.5%. These workers can expect maximum earnings upwards of this figure.

Head of Engineering roles have seen salaries remain stable, with maximum annual earnings at £120,000. This is also true of many other roles, which have shown resilience despite the challenging circumstances the sector has experienced.

Aspire’s Global Managing Director, Terry Payne, said: “The tech sector has gone through a difficult period over the last 18 months, with widespread redundancies at big-name firms. But steady salary growth across key roles looks like the first green shoots of recovery – a welcome sign for employers and candidates alike.

“Layoffs across the industry mean there are plenty of highly-skilled candidates on the market. Employers with ambitions to grow beyond the struggles of the last year can attract these workers by offering competitive salaries. I’m optimistic this marks a turning point for the sector.”

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Salary growth slows to 9% in India

Slower salary increases hinder job market

India’s job market experienced a slowdown in salary growth during the fiscal year 2022-23, with overall pay increments decreasing to 9% from 10% compared to the previous year. This decline was primarily attributed to sectors such as agriculture and agrochemicals, automobile and allied industries, and BFSI (banking, financial services, and insurance), among others. The findings were reported by Teamlease and published by the Press Trust of India.

The report, titled ‘Jobs and Salary Primer Report’ for 2022-2023, surveyed 403 employers and 357 employees across nine major cities and 17 industries.

Teamlease’s research revealed a range of salary growth between 3.20% and 10.19% across various sectors, indicating a slightly slower pace compared to the previous year.

Kartik Narayan, the Chief Executive Officer of Staffing at TeamLease Services, attributed the modest salary growth to socioeconomic factors such as global layoffs and funding challenges, resulting in a lower median salary growth compared to the previous year.

Despite the dip in overall salary growth, the report highlighted that more than 41% of job profiles in various industries had less than a 5% pay difference between permanent and temporary roles, suggesting an increasing parity in temporary employment.

Kartik Narayan emphasized this point, stating, “An interesting aspect to note is that a staggering 41% of all profiles have less than a 5% pay difference between compensation structures for permanent and temporary roles, indicating the growing parity of temporary employment.”

The report also noted that as organizations continued to prioritize growth and digital transformation, the demand for sales and IT roles remained high. However, the BFSI segment experienced a significant decline in average salaries in FY23, following two years of steady growth.

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77% of IT professionals report an increase in base salary

Positive outlook for IT salaries

According to the latest report titled “InformationWeek 2023 US IT Salary Report: Rising Salaries and Closing the Gender Pay Gap,” the salary prospects for IT professionals remain positive despite increasing labor costs and economic inflation, as companies strive to cut back. The report highlights several key findings that shed light on the current state of the IT job market.

In 2022, a significant 77% of IT professionals experienced a boost in their base salary. The median salary witnessed a 12% rise, climbing from $125,000 in 2021 to $140,000.

The survey also revealed that 61% of IT professionals expressed satisfaction with their overall compensation, while 62% reported being content with their jobs in general.

While the gender pay gap persists, both men and women witnessed salary increases. Women experienced a substantial 28% rise in their annual salaries, reaching a median of $135,000 in 2022. On the other hand, men’s pay increased by 9% to $140,000.

The report further disclosed that the majority of IT professionals, 58%, had no plans to seek employment at another organization in the following year. However, for those considering a job change in 2023, higher pay emerged as the primary motivating factor for 70% of respondents.

Sara Peters, the editor-in-chief of InformationWeek, commented on the findings, noting that despite uncertainties in the market, the IT pay outlook remains optimistic. Companies are adjusting salaries to account for the rising cost of living and are committed to addressing pay parity and diversity in their hiring practices.

Peters acknowledged the recent layoffs in the tech industry but emphasized that a significant majority of IT professionals still report positive job satisfaction. Additionally, almost nine out of ten respondents expressed confidence in their job security.

Looking ahead, Peters acknowledged the potential impact of generative AI and other automation technologies on IT salaries and hiring trends, stating that next year’s survey results will provide more insights.

The survey encompassed responses from 456 full-time IT professionals across various industries, including healthcare, financial services, banking, consulting, IT services, manufacturing, education, and government.

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Microsoft freezes salary hike for full-time staff this year

Employee compensation impacted by economic conditions

Microsoft’s full-time employees will not be receiving salary increases this year, as the company prepares for the impact of current economic conditions, according to reports. The decision was communicated to the staff through an email from Microsoft CEO Satya Nadella, as confirmed by BQ Prime, who obtained a copy of the email.

Nadella acknowledged that the choice not to increase salaries for full-time employees was not made lightly by the senior leadership team. However, he emphasized its necessity in ensuring the long-term success of the company. Certain hourly or equivalent roles will still receive salary increases, as stated by Nadella.

While the freeze on salary increases is in effect, Microsoft will maintain its budget for bonuses and stock awards this year. In 2022, the company significantly raised its global merit budget and annual stock ranges by at least 25% for employees at level 67 and below, as previously reported by CNBC. This year, Nadella mentioned that the bonus and stock award budget will be maintained, but not overfunded as it was in the previous year, aligning it more closely with historical averages.

Nadella made it clear that outstanding performance will still be recognized with generous rewards, but managers will need to carefully allocate their budgets to differentiate pay based on performance. This approach applies not only to the senior leadership team but also to Nadella himself. Consequently, salary increases will be absent, and annual performance-based bonuses for the senior leadership team will be considerably lower compared to the previous year.

Microsoft’s decision to freeze salary increases coincides with its increased focus on artificial intelligence (AI) as a major investor in OpenAI, as well as the global economic uncertainty. Earlier this year, the tech giant announced plans to lay off 10,000 employees as part of its strategy to align its cost structure with revenue and customer demand. LinkedIn, one of Microsoft’s subsidiaries, also recently disclosed its intention to reduce its workforce by over 700 positions.

These measures align with the actions taken by numerous employers worldwide, who are implementing layoffs in anticipation of economic turbulence.

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UK employers ignore calls for salary transparency on job ads

Job ads with a salary receive 6x more applications

The proportion of UK job ads including vital salary information has slipped to a seven year low as employers ignore calls for salary transparency.

Adzuna – a job search engine company – analysed 80 million UK job ads advertised between 2016 and April 2023 to highlight the sectors, regions, and companies who are most and least transparent about pay.

Despite the data showing job ads with a salary receive 6x more applications, 51.5% of UK job ads disclose salary in April 2023 – down from 61.4% in April 2022.

Key report findings:

  • Energy, oil and gas sector sees largest fall, followed by admin and trade and construction
  • Most secretive sectors: retail, scientific and QA, creative and design
  • West Midlands is the most straight talking with 55.6% of job ads disclosing pay
  • Only 29.5% of job ads in Northern Ireland feature salaries, the lowest of any region, followed by Scotland (41.7%), Wales (47.0%) and London (49.7%).

Job vacancies have slipped -19.5% across the UK and the labour market has become tighter. Falling salary transparency suggests employers may be using this shift in power to rein in salary disclosure and keep a tight lid on budgets when filling roles.

Only 26.8% of Retail jobs included salary information in April 2023, falling 14 percentage points (pp) from 40.8% a year ago. The next worst offending sectors are Scientific and Quality Assurance (QA) (29.3%) and Creative and Design (31.1%).

Compared to a year ago, salary transparency has slipped fastest in the Energy, Oil and Gas sector, where the proportion of job ads disclosing salary information has fallen by 17.5 pp from 50.9% to 33.4%. Similarly, fewer salary details are on offer for admin jobs compared to a year ago, down 17.1pp from 73.0% to 55.9%. Trade and Construction saw the third largest fall, down 16.3pp from 69.1% to 52.8%.

Voluntary jobs are most likely to include pay information, with 84.3% of job ads disclosing salary in April 2023, followed by Social Work roles (72.9%) and Logistics and Warehouse positions (70.9%).

London has been cited as having both the worst ethnicity pay gap and worst gender pay gap, suggesting a correlation between a lack of transparency and inequality.

Andrew Hunter, cofounder of Adzuna, said: “Compared to last year, the power in the jobs market has shifted back to companies and we are seeing fewer job ads disclosing the salary as employers find it easier to fill positions. As well as making the job hunting process less stressful and less time consuming for jobseekers, salary transparency is a crucial step towards eliminating pay gaps in the jobs market.”

 

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Higher salaries driving resignations for 91% of Malaysians

Malaysian organizations warned about talent loss 

A recent report has cautioned organizations across Malaysia about the potential loss of skilled employees, as a study revealed that salary continues to be a significant motivating factor influencing career decisions.

The 2023 Salary and Bonus Expectations report by Randstad highlighted that 91% of surveyed employees stated that a higher salary serves as a motivation to switch employers this year. The remaining nine percent of respondents cited various reasons for their decision:

  1. Unfavorable workplace culture (50%)
  2. Poor work-life balance (27%)
  3. Excessive workload (12%)
  4. Desire for a career change (11%)

The study’s findings emphasized that employees now anticipate higher salaries and fair bonuses due to inflation and increased living costs. Approximately 54% of respondents expressed the belief that their compensation did not adequately reflect their contributions, skills, and experience.

Despite these expectations, only 49% of respondents reported receiving a salary increase of up to five percent. Additionally, 39% indicated that their salaries would not be adjusted this year, and 31% stated they would not receive an annual bonus for their previous contributions. These figures differ significantly from the experiences of 30% of respondents who changed employers within the past 12 months, as they reported receiving higher pay. Among them, almost half (49%) received a salary increase of over 20%. The remaining respondents received the following salary increments:

  1. 16% to 20% increase (12%)
  2. 11% to 15% increase (12%)
  3. 6% to 10% increase (11%)
  4. Less than five percent increase (16%)

Randstad emphasized the “crucial” importance for employers to recognize the role of salary in motivating and retaining talented individuals. The company stated on its website, “To attract top talent and meet new expectations, companies must conscientiously review and adjust their internal salary and bonus structures to align with evolving skill demands, meet employee expectations, and remain competitive in the market.

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New research reveals the top UK locations for HR professionals

Scottish city ranks as the most affordable place to live and work

The study, by HR and payroll software provider Ciphr, ranked 100 towns and cities against key criterias including; relocating, HR manager’s average earnings, the number of medium and large employers and housing affordability.

Aberdeen rates as the top place for HR managers to live and work- thanks to its high average HR manager salary of £50,450 (data compiled from Indeed, Glassdoor, and Adzuna) and high business density per capita. The number of Aberdeen businesses with over 50 employees  is 17.2 per 10,000 working-age adults – above the UK average of 12.4 per 10,000. The Scottish city is one of the UK’s most economical places to live with average rental properties costing £786 a month and average properties selling for £187,543.

In comparison, a typical UK home costs £287,506, 6.5 times the average annual HR manager salary of £44,050. HR managers who rent, expect to spend a quarter of their wages on housing – around £923 per month.

After Aberdeen, Northampton and London scored highly for HR professionals to work, followed by Huddersfield, Slough with Warwick, in joint fourth place, and Manchester, Bournemouth, Stockton-on-Tees, and Reading also made the top 10.

Chichester enjoys the highest average HR manager salary of £51,800 compared to the average full-time salary of £30,298 (according to the Office of National Statistics’ latest ’employee earnings by workplace’ figures). While the pay is high, all the top 10 highest paying towns and cities (except Aberdeen) are among some of the least economical places to rent or buy in the UK (comparative to average HR manager salaries).

Besides salary, job hunters are influenced by;

  • Work-life balance
  • Remote and flexible working hours
  • Good employee benefits and rewards
  • Job security and job satisfaction
  • Learning and development opportunities.

Across the UK, HR managers need to spend over 6.5 times their annual earnings to buy a property in their town – in London they need 14.5 times their income. The least affordable location is; Sevenoaks in Kent, closely followed by Bath, St Albans, and Winchester. The most affordable housing is in Stockton-on-Tees, Stoke-on-Trent, Middlesbrough, Sunderland, and Blackpool.

Top 10 UK towns and cities with the highest density of businesses (over 50 employees) are:

Winchester (19.1 per 10,000 working-age adults) at the top and Northampton / West Northamptonshire (16.3) in 10th place. For more information, please visit www.ciphr.com.

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Are employers offering salaries that match those of their industry competitors?

Administrative and support industry reported a 12.66% rise in weekly wages

In the continuous war for talent, it’s important for TA teams to ensure they’re paying market-related salaries in order to attract the right talent for their organisations. When workforce planning, TA teams should be sure to investigate what competitors in their industries are paying to be able to compete for good candidates.

In a recent study conducted by UK trading platform CMC Markets has found that the mining and quarrying industry has seen the largest increase in wages among all UK industries between January 2022 and January 2023.

The study analysed data from the Office for National Statistics’ Wages and Salaries Survey since January 2000. The average weekly earnings in the mining and quarrying industry rose by 12.95% over one year, from £1,203 to £1,382.

The administrative and support service activities industry comes in second, with a 12.66% increase in weekly earnings from £490 to £561. The professional, scientific & technical Activities industry takes third place, with an increase in average weekly earnings from £854 to £940, a percentage change of 9.15%.

The manufacturing industry for chemicals and man-made fibres and the education industry round out the top five, with weekly earnings increasing by 8% and 7.4%, respectively, between January 2022 and January 2023.

Michael Hewson, CMC Markets Chief Market Analyst commented: “This list is varied in terms of industries, showing that wages are rising steadily in many lines of work in the UK. However, with this data essentially summarising an entire industry as the data is across multiple industries, it will be interesting to see how wages have increased in the top and bottom end of these industries, especially with strikes occurring in many of them, including education, due to pay disparity and unsuitable wages.”
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