SINGAPORE: Employers should reward employees with fair and sustainable wage increasesmanilaplay, said the National Wages Council (NWC) on Thursday (Oct 10).
This takes into account the sustained productivity growth over the long term, as well as the improved economic outlook and expected moderation in inflation in 2024, it added.
Employers who have done well should reward their employees with built-in wage increases and variable payments, said the council in its wage guidelines for December 2024 to November 2025.
Those who have not done well may exercise wage restraint, with management leading by example, it added.
When asked why NWC did not call for a one-off payment like it did in 2023, president of the National Trade Union Congress (NTUC), K Thanaletchimi noted that "there is an intention" in the guidelines for employers who have done well to provide a variable component, which includes bonuses or other forms of one-off payments.
When companies do well, they are expected to reward their workers for their productivity, NWC's chairman Peter Seah added.
In turn, this also helps employers to retain workers, he said.
INCREASES FOR LOWER-WAGE WORKERSThe NWC also recommended a 5.5 per cent to 7.5 per cent increase in gross monthly wages for lower-wage workers, or a pay bump of at least S$100 (US$76.42) to S$120, whichever is higher.
Employers who have done well and have positive business prospects should provide an increase at the higher end of the range, while companies that have done well but face uncertain prospects should raise salaries by a percentage or amount in the lower to middle bound of the range.
Businesses that have not done well should increase wages at the lower bound of the range. "If business prospects subsequently improve, employers should consider further wage increases," said NWC.
Lower-wage employees are those who earn a gross monthly wage of up to S$2,500. That corresponds approximately to the 20th percentile wage level of full-time employed residents.
Employers should implement the flexible wage system in full, comprising an annual variable component and monthly variable component, said the council.
The flexible wage system enables employers to make quick adjustments during downturns to retain jobs and during upturns to retain talent, it added.
The government accepts NWC's guidelines for the coming year, said the Ministry of Manpower (MOM) in a separate press release on Thursday.
"The government stands with tripartite partners to call on employers to reward employees with wage increases or variable payments that are fair and sustainable," said MOM.
The ministry observed different trends - outward-oriented sectors such as information and communications, as well as manufacturing show strong productivity growth, said permanent secretary Ng Chee Khern.
Domestically oriented sectors like food and beverage services as well as administrative and support services are "lagging", he said, adding that these sectors must press on in their transformation.
Most firms adopted the general guidelines last year - 62.3 per cent of those who did well and had good business prospects gave good wage increases and provided annual variable compensation, said Mr Ng.
Among those who did well but had uncertain business prospects, 73.8 per cent provided annual variable compensation last year, he added.
The Singapore National Employers Federation (SNEF) strongly endorses NWC's guidelines, said its president Tan Hee Teck.
"Wage growth must be supported by productivity gains. We face disparity in productivity across sectors and it is essential that wage adjustments reflect these variations," he added.
"If not aligned, wage growth can lead to rising costs that can cripple businesses and jeopardise jobs."
Workers are facing more difficulties related to the higher cost of living because core inflation is "certainly on the higher side", said Ms Thanaletchimi.
"We actually hope that the NWC guidelines take into consideration the plight of the workers and ensure that the employers will be more magnanimous in giving their increments or bonuses," she added.
NTUC is also heartened by the inclusion of broad middle-income workers in the NWC guidelinesmanilaplay, said Ms Thanaletchmi.