SINGAPORE – Total wage growth in the private sector remained stable at 4.9 per cent in 2015, due to the increase in employer contributions to the Central Provident Fund.
Releasing its “Report on Wage Practices 2015” today, the Manpower Ministry (MOM) said nominal wages went up by only 4 per cent in 2015 amid softer economic conditions. This is lower than the 4.9 per cent growth achieved in 2014.
However, negative inflation in 2015 helped real wages to pick up pace, climbing by 5.4 per cent compared to 3.9 per cent in 2014.
The report also found fewer firms were profitable last year – 79 per cent reported they were profitable in 2015, down from 82 per cent the year before.
MOM pointed out that 90 per cent of private sector employees were under some form of flexible wage system last year, the highest since 2004.
Having a narrower maximum-minimum salary ratio remained the most common wage recommendation that was adopted. It covered two in three (66 per cent) employees in December 2015.
Linking variable bonus to key performance indicators (KPI) (52 per cent of companies surveyed) and having the monthly variable component (MVC) (32 per cent) were other wage practices seen last year.
Said MOM’s statement: “As most firms had put in place some form of flexible and performance-based wage system that gave flexibility to adjust wages according to the prevailing business climate, the proportion of employers that gave wage increases to their employees fell in 2015.”
Only 64 per cent of companies raised the total wages of their employees in 2015, down from 72 per cent in 2014.
chenj@sph.com.sg
