The global solution for human resource professionals, combines custom research, strategic white papers, country primers, webinars and OnDemand educational programs, and the expert guidance...
July 6—Just short of nine out of 10 Singaporean employees have some sort of flexible wage structure, a decade high, a spokesperson for the city-state's Ministry of Manpower confirmed to Bloomberg BNA.
Some 85 percent of employers put some form of flexible and performance-based wage system in place during 2014, according to the ministry's Report on Wage Practices 2014, and “as of December 2014, 89 percent of the workforce in the private sector was under some sort of flexible wage system (i.e., at least one key wage recommendation), up from 86 percent in 2013,” the MOM spokesperson said.
Reaching this level has taken Singapore a decade and has been helped by its tripartite approach to employment issues, which brings employers, employees and the government into the decision-making process.
“The high in 2014 extended from a general uptrend in the implementation of the tripartite wage restructuring recommendations since their release in January 2004,” the MOM spokesperson said. “While some year-to-year fluctuations may be expected, the take-up rates have generally stabilized in recent years.”
• implementing a variable bonus linked to Key Performance Indicators (KPI),
• introducing the Monthly Variable Component (MVC) in wage structure and
• narrowing the average maximum/minimum salary ratio for the majority of employees to 1.5 or less.
This has allowed a much more flexible approach to pay.
KPIs are unique to each company and may include (for example) a company's profitability and revenue, while the MVC is that part of the monthly basic wage that can be quickly adjusted in response to changing business conditions, including (for example) overtime pay and allowances.
“The MVC can be built-up through wage increases or ‘hived off’ from basic wage,” the spokesperson said.
Having a narrow maximum/minimum salary ratio remained the most common wage recommendation adopted, two in three (66 percent) private sector employees working in such establishments in December 2014, MOM said in its recently published Report on Wages Practices 2014.
This was followed by linking variable bonuses to KPI (52 percent) and having the MVC (33 percent) in the wage structure.
The report flagged two other decade-long changes. One was the general increase in employees covered by at least one flexible wage component in smaller (25 to 199 employees) and large (200+ employees) businesses. In the former, the degree of coverage rose to 84 percent from 63 percent, in the latter to 93 percent from 85 percent.
Among economic sectors, transportation and storage led the way at 95 percent of employees covered followed by community, social and personal services and accommodation and food services both at 93 percent and construction at 81 percent.
To contact the reporter on this story: Michael Mackey in Bangkok at correspondents@BNA.com
To contact the editor responsible for this story: Rick Vollmar at firstname.lastname@example.org
The MOM's Report on Wage Practices is available at http://stats.mom.gov.sg/Pages/Report-On-Wage-Practices-2014.aspx.
For more information on Singaporean HR law and regulation, see the Singapore primer.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)