Leaders are feeling optimistic about the year
Over 87% of companies across the Asia Pacific region will be conducting a salary review this year, as leaders expressed ‘cautious optimism’ about business recovery and stability in the post-pandemic world.
Plans around salary budgets differ based on the industry the company is in, however, according to a recent study. This is also true for businesses in Singapore.
Leaders in Australia, China, New Zealand, Taiwan and Thailand are especially optimistic about 2021. Most who shared a positive business outlook for the new year are based in countries that have experienced relative success in containing the virus.
What’s more, China was recently noted as the only country in the world to avoid a recession in 2020 and is enroute to sustaining a recovery this year. This means well for leaders hoping to tweak their reward and compensation strategies in 2021.
The study by Willis Tower Watson also found that a mere 13% of companies expect to continue with cost-cutting measures such as a pay freeze this year.
Read more: HR cautious about salary boosts for 2021
To get better insights on what leaders here can expect and prepare for in 2021, HRD reached out to Vidisha Mehta, managing director and head of talent & rewards in Singapore, at Willis Towers Watson.
“While Singapore’s overall salary increase is projected to be at 3.5% this year, we expect some variations of the increase by industry,” Mehta told HRD. “This is partly due to the impact of the pandemic on operations and business results of companies here.”
Employers in industries such as high tech and pharmaceutical & healthcare cited plans to increase salary budgets, but companies in energy & construction, as well as property & engineering sectors projected lower salary budgets in 2021.
“This cautious optimism is in part the result of early actions that were taken in 2020 when the impact of the pandemic was first felt,” she said.
She explained that “early” measures like hiring and pay freezes across Q2 and Q3 of 2020 “yielded positive financial results” and allowed companies to be optimistic with their salary increases this year.
Read more: Why HR should monitor the company's financial health
When asked how leaders can deliver more effective compensation strategies, Mehta suggested taking a closer look at what employees want.
“One key shift in compensation strategy that we have observed in 2020 has been to analyse and understand how benefits have been utilised by employees,” she said. “[Also] which benefits are becoming more important – particularly given remote work arrangements.”
For instance, many employers channelled savings on office rentals, meals allowances and travel expenses last year, into reimbursing costs of home office or ergonomic equipment for employees working remotely, according to a separate study by them.
Mehta expects leaders to remain focused on a similar employee-centric strategy in 2021.
