Employers encouraged to provide 'fair, sustainable' wage increases
Singapore's National Wages Council (NWC) is recommending a 5.5%–7.5% wage hike for lower-wage workers (LWW) in its latest 2024/2025 guidelines.
Employers who have done well and have positive business prospects should provide their LWWs with a built-in wage hike at the higher end of 5.5% to 7.5% of gross monthly wage, or a wage increase of at least $100 to $200, whichever is higher, according to the NWC.
For employers who have done well but have uncertain business prospects, the NWC recommended that they provide LWWs with a pay hike at the middle to lower end of 5.5% to 7.5% of gross monthly wage, or a wage hike of at least $100 to $120, whichever is higher.
But for employers who have not done well, the NWC said they should provide their LWWs with a built-in wage increase at the lower end of 5.5% to 7.5% of gross monthly wage.
"If business prospects subsequently improve, employers should consider further wage increases," the NWC said in the guidelines.
The NWC raised the recommendations as it encouraged employers across Singapore to reward employees with "fair and sustainable" wage increases.
"Taking into account the sustained productivity growth over the longer term, the improved economic outlook and expected moderation in inflation in 2024, the NWC encourages employers to reward employees with wage increases that are fair, sustainable and share the gains from labour productivity improvements," the NWC said.
According to the NWC, employers who have done well should reward employees with built-in wage increases and variable payments commensurate with the employers' performance and employees' contributions.
On the other hand, the NWC said employers who have not done well may exercise wage restraint, with management leading by example.
"These employers should make greater efforts to improve business processes and productivity, especially by investing in upskilling their employees," the guidelines read.
For employers who are facing uncertain business prospects, the NWC said they should consider implementing the Flexible Wage System to either enhance resilience or reward employees while retaining wage flexibility.
In a statement, the Ministry of Manpower (MOM) said the government accepts the recommendations from the council.
"The Government stands with tripartite partners to call on employers to reward employees with wage increases or variable payments that are fair and sustainable," MOM said.
"Employers should take into account the sustained productivity growth over the longer term, the improved economic outlook and expected moderation in inflation in 2024 in assessing wage adjustments this year."
It also lauded NWC's recommendations for LWWs for balancing "meaningful" wage increments for LWWs with business sustainability.
"To support employers in uplifting lower-wage workers, the Government introduced the Progressive Wage Credit Scheme in 2022 to co-fund wage increases of eligible lower-wage workers from 2022 to 2026," it said.
The government also encouraged employers to upskill their workforce for "higher-value jobs" to increase labour productivity and ensure sustainable wage growth.
"Employers and employees can tap on various enterprise grants and jobs and skills programmes provided by Government agencies," MOM said.
Meanwhile, the Singapore National Employers Federation (SNEF) also said it "strongly endorses" the latest NWC guidelines.
The SNEF said the guidelines "provide a clear framework for businesses to align wage increases with productivity growth, ensuring the long-term sustainability of wage improvements in Singapore."
The federation said it supports the recommendation of granting LWWs a built-in wage increase of 5.5%–7.5% of gross monthly wage or a wage hike of at least $100–$120.
"SNEF would like to reiterate that this recommendation applies specifically to LWWs and not for the rest of the workforce," it said.
"The significantly higher recommendation in terms of wage increases for LWWs is a deliberate move, to narrow the wage gap between LWWs and the median wage worker."
Tan Hee Teck, President of SNEF, called on employers to "work even harder" to ensure workforce transformation to drive productivity in Singapore.
"I call on all employers to work together with SNEF to align wage growth with productivity, support LWWs, and drive workforce transformation. This collective effort will strengthen Singapore's competitiveness and create a resilient, adaptable workforce equipped to meet the challenges of the future," Tan said in a statement.
