Banking and financial services topped the list of sectors with the highest salary increases for 2011, according to a report by global management consultancy Hay Group.
Salaries, excluding any pay freeze, rose by 7% for this year in the banking and financial services sector, the Hay Group said in a report based on a survey conducted in September and covering over 480 local and foreign Singapore-based companies.
Transportation and the fast-moving consumer goods sectors totted up the second and third highest pay hikes at 4.9% and 4.6%, respectively, the consultancy said.
Polled on their business sentiments and salary and bonus projections for the next 12 months, the respondent firms said average salary increases, again excluding any pay freeze, averaged 4.4% for 2011.
Salary increases for next year are forecast to rise by 4.4%, according to Hay Group's report titled Bracing for an unpredictable economy.
"Traditionally, the market trend around actual and forecast for salaries indicates a higher salary forecast for the following year. This time around, we've observed that the forecast is stagnant," said Victor Chan, Hay Group regional general manager for productized services for Singapore and ASEAN.
"Although the outlook for 2012 is less optimistic, the tight labour market in Singapore will nevertheless ensure that salary increments remain positive," he added.
The consultancy said firms' senior management will have something to cheer about this festive period as they can expect to receive an average bonus payout of 3.6 months.
Middle management will look forward to 2.8 months, while junior professionals and clerical support staff will receive an average bonus payout of 2.4 months and 2.2 months, respectively, Hay Group said.
The forecast average variable bonus payout is 2.7 months for the coming 12 months, according to the report.
The report also showed that the actual average variable bonus -- performance-based bonuses excluding annual wage supplement, contractual bonuses -- was 2.7 months for a 12-month period, slightly more than the average of 2.3 months in 2010.
Hiring outlook for 2012
Reflecting the downward business sentiment, 46% of the surveyed organisations plan to increase staffing levels by five to 10%, compared to 62% of the respondents during the same time last year.
The Hay Group report stated that the employee group in high demand are technical specialists (62%) and junior professionals (47%). Middle Management is seeing the highest cutback among the groups at 35%.
Looking by job functions, the main focus of recruitment is on engineering (30%), Sales (29%), finance & accounting (27%) and administration/support service (27%).
Chan cited the value of investing in training at this time.
"As businesses are operating with leaner resources, it is imperative that organisations continue to invest in training and development to get the best out of their existing talent force and provide them with the opportunity to gain exposure to other key functional business areas within the organisation," he said.