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Report On Wage Practices, 2013

5 June 2014

  1. Employers gave higher wage increases, amid the tight labour market and improved economic conditions in 2013. More employers also adopted the National Wages Council’s recommendation to give a built-in wage increase to low-wage employees earning a basic monthly salary of up to $1,000. These are the key findings from the "Report on Wage Practices, 2013" released by the Ministry of Manpower’s Research and Statistics Department.

    Main Findings
  2. Total wages (including employer CPF contributions) in the private sector grew by 5.3% in 2013, higher than the increase of 4.2% in 2012. Coupled with lower inflation1, real total wages (including employer CPF contributions) rose by 2.9% in 2013, after declining by 0.4% in 2012.
  3. As of December 2013, nearly eight in 10 (77%) private establishments with employees earning a monthly basic salary of up to $1,000 gave or intended to give wage increases to these employees in 2013, a substantial rise from the 60% in 2012. This included 57% of establishments that gave at least $60 built-in wage increase as recommended by the National Wages Council in 2013, up from the 28% that gave at least $50 recommended in the preceding year.
  4. There has been a general uptrend in the implementation of the flexible wage measures since the release of the tripartite wage restructuring recommendations in January 2004, resulting in a large majority of employees in the private sector being under some form of flexible wage system. In December 2013, 86% of private sector employees were working in establishments which had at least one of the flexible wage components recommended by the tripartite partners2. The proportion has largely stabilised in recent years, after increasing from 76% in June 2004.
  5. Having a narrow maximum-minimum salary ratio was the most common wage recommendation adopted, with 63% of private sector employees working in establishments with this flexible wage component. This was followed by linking variable bonus to Key Performance Indicators (KPI) (51%) and having the Monthly Variable Component (MVC) (34%) in the wage structure.

    For More Information
  6. The report is available online on the MOM's Statistics and Publications webpage.

1 Inflation, as measured by the change in consumer price index for all items, eased to 2.4% in 2013 from 4.6% in 2012.
2 The three key wage recommendations of the tripartite partners (representing employers, workers and government) are:
(1) implement variable bonus linked to Key Performance Indicators (KPI);
(2) introduce the Monthly Variable Component (MVC) in wage structure; and
(3) narrow the maximum-minimum salary ratio for the majority of their employees to an average of 1.5 or less.