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Employers performing well with positive business prospects are asked to provide a wage increase of 5.5-7.5% or S$100-$120 for employees earning a gross monthly wage of up to S$2,500.
The Singapore government has accepted the National Wages Council (NWC) guidelines for 2024-2025. These guidelines emphasise sustainable wage increases, focusing on linking pay growth to productivity.
Among the major recommendations that were put forward and accepted, the government has called on employers to reward employees with wage increases or variable payments that are fair and sustainable. Employers, the statement said, 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.
The government has also taken noted of the cost pressures on businesses and the continued downside risks in the global economy. As such, employers have been urged to adopt the Flexible Wage System (FWS) to provide wage flexibility.
As explained by the Ministry of Manpower (MOM), the FWS enables employers to make quick wage adjustments during business downturns to sustain their businesses and save jobs, and restore wages in tandem with business recovery to retain talent.
With the aim of attaining sustainable wage growth, employers have also been tasked to press on with efforts to transform their businesses and upskill their workforce for higher value jobs to as to increase labour productivity.
To this effect, various enterprise grants and jobs and skills programmes have been made available.
Focus has also been placed on efforts to uplift lower-wage workers, Apart from the Progressive Wage Model, Local Qualifying Salary, and the Progressive Wage Credit Scheme that are all already in place,
NWC's recommendations aim to balance meaningful wage increments for lower-wage workers with business sustainability. Emphasis has been placed on the Progressive Wage Credit Scheme, which was launched in 2022, to co-fund wage increases of eligible lower-wage workers from 2022 to 2026.
The scheme provides transitional support to businesses in the near term – which, the statement said, gives employers time to invest in upskilling employees and improving firm-level productivity so that the wage increases are sustainable in the long term.
"The Government will continue to work with tripartite partners to champion fair, inclusive and sustainable wage growth for our workers, as recommended by the NWC, while ensuring that our businesses stay productive and competitive."
More details on the recommendations are shared below:
1. Fair and sustainable wage increases: Employers should reward employees with wage increases based on company performance and contributions, incorporating both built-in and variable payments. To enhance flexibility during uncertain times, businesses are encouraged to adopt the Flexible Wage System (FWS), which includes the Annual Variable Component (AVC) and Monthly Variable Component (MVC).
2. Sustained wage growth for lower-wage workers: Employers performing well with positive business prospects are asked to provide a wage increase of 5.5-7.5% or S$100-$120, whichever is higher, for employees earning a gross monthly wage of up to S$2,500. Employers facing uncertainty should provide increases at the middle to lower end of that range.
3. Job transformation and upskilling: Employers should focus on transforming jobs and upskilling employees to improve productivity. This includes redesigning jobs, building training capabilities, and strengthening HR functions to support business transformation. Employees, on the other hand, are encouraged to proactively reskill and upskill to remain competitive in the economy.
Photo / MOM
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