As reported previously in this article, 71 percent of Singapore employers are giving a salary increase of 3 percent or more. Furthermore, 81 percent of employers intend to give bonuses of 1 month or more to their employees. This is in line with 6 in 10 workers in Singapore pushing for a pay rise as the cost of living increases amid a sharp labour crunch, according to Straits Times. Since the Consumer Price Index was up 5.4% year on year in March, employees will likely leave for a better paying job if their expectations of pay raises are unmet. This would in turn lead to a higher turnover rate.

Such findings come at a time when Singapore faces record vacancies in the job market of 114,000 job vacancies in December 2021, more than twice the figure in December 2020. The cost of living is also rising rapidly in many parts of the world amid global inflation.

Workers may feel they deserve a pay rise in the number of extra unpaid hours they have been doing, by starting early, staying late or working over breaks. 4 in 10 workers also reported putting in 6 to 10 hours of unpaid overtime work each week, with an average of unpaid overtime hours of 8 hours.

Respondents also place a higher than average importance on pay with 71 percent considering pay to be the most important factor. Many workers feel that they are entitled to a raise due to working hard through the pandemic and having more vacancies than job seekers in the current job market. Employers should bear in mind that maintaining a stable and skilled workforce is more challenging than ever in today’s tight labour market and reconcile the driver for higher wages with business continuity.

However, financial incentives alone are unsustainable in the long run and compensation can only get talent through the door. Employee retention depends on many other factors such as relationships with co-workers and alignment of a company’s goals and objectives with employees’ interests and aspirations.

Employers should handle employees’ requests for salary hikes with clear pay, promotion and staff development policies. Pay scales for different levels should be transparent so that employees have a clear understanding of their position within a range and the pace of salary progression based on seniority, performance and skill acquisition. Clear policies on promotion and internal access to job opportunities through development programmes should also be highlighted.

Ultimately, it also depends on the business performance and prospects of each company. Loss in revenues in the past two years in industries like aviation and hospitality were deadweight, unlike some companies that could sell more products to make up for the loss in revenue due to pent-up demand.

Would you be giving a pay raise to your employees soon? Why or why not?