Businesses planning to hike salaries, expand headcount this year
Employers in Singapore have cited manpower costs as one of the top challenges faced by businesses while they continue to raise salaries this year in the face of recruitment and retention challenges.
This is according to the latest national survey from the Singapore Business Federation (SBF), which sought the responses of over a thousand companies across key sectors in the state.
More than half of the respondents (58%) said the top challenge faced by organisations is business cost, with manpower cost named as a key component (75%). Other factors include:
- Cost pass-through from upstream suppliers (58%)
- Higher utilities cost (56%)
The struggle with manpower cost comes as employers attempt to address various manpower challenges such as the availability of manpower (53%) and retention of employees (42%).
Another 58% said they also face foreign manpower challenges, attributing this to the changes in the qualifying salaries for S Pass (70%) and Employment Pass (65%) holders.
Kok Ping Soon, CEO of SBF, said many businesses are entering 2024 with "greater caution" amid heightened cost pressures and continued manpower challenges.
"It is no longer business-as-usual for companies as they navigate new challenges in an uncertain economic climate," the CEO said in a statement.
Continued investment on manpower
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Despite the challenge of manpower costs, however, 42% of the respondents said they plan on hiking salaries next year and 26% said they want to expand their headcount.
This comes as 72% of businesses said they are already offering competitive salary and benefits packages to attract and retain employees, according to the survey.
They are also focusing on professional development and training (43%), as well as providing hybrid work options (35%), benefits that are highly in demand among many employees lately.
Request for support
In facing these challenges, the businesses in Singapore are turning to the government's Singapore Budget 2024.
Nearly nine in 10 of the respondents (86%) said they want support on addressing costs, while 65% want assistance on cash flow management challenges.
More than half of the respondents (53%) also said they would like support in hiring, developing, and retaining talent.
"Government support for companies to address today's cost challenges while equipping them with required capabilities in digitalisation, internationalisation, and ESG will be needed for businesses to be competitive and future-ready," Kok said.
The Ministry of Manpower (MOM) has been encouraging employers to make use of their available programmes to remain competitive amid the current economic landscape.
"We encourage employers to press on with business transformation and equip their workers for expanded or redesigned job roles," MOM said during the release of the Labour Market Report.
Among their solutions include the Jobs Transformation Maps, as well as the Support for Job Redesign under Productivity Solutions Grant, to help businesses adapt to changing employment trends.