According to ECA’s Salary Trends Survey 2020/2021, salary increases for workers in Singapore are expected to rise by 3 percent in 2021, up from 2.5 percent in 2020.
ECA International is one of the leading providers of information, software, and expertise for the management and assignment of employees around the world. The annual Salary Trends Report analyses current and projected salary increases for local employees in 68 countries across the world.
Upon factoring in the predicted inflation rate of 0.3 percent for next year, workers in Singapore will see an average salary increase of 2.7 percent in real terms. While down slightly from a 2.9 percent real salary increase they saw this year, it is one of the highest in the world.
“Singapore is expected to be the third-highest in the global rankings for real salary increases on par with Thailand and Colombia. Second highest in the Asia Pacific on par with Thailand, despite the lower forecasted increase in 2021 compared to what workers saw this year,” Lee Quane, Regional Director of Asia at ECA International said.
Singapore has experienced consistently low inflation in recent years, with the country seeing a deflation of -0.4 percent in 2019, and is expected to see an inflation level of just 0.3 percent in 2021.
“This will thus result in higher real salary increases for workers in Singapore, as compared to countries with higher inflation rates in the Asia Pacific such as Hong Kong,” Quane highlighted.
Quane continued, “The expected rise in salaries next year is largely due to fewer companies implementing salary freezes, with only 22 percent of those surveyed saying they will continue to freeze salaries into 2021, as compared with 36 percent this year.”
All locations in the Asia Pacific saw lower rates of salary growth in 2020, with an average salary increase of 3.2 percent. However, companies anticipate a recovery in 2021, with the average salary increase in the region forecast to jump to 4.3 percent.
In terms of real salary increases, countries in the region once again dominate the top of the global rankings, with eight of the top ten highest real salary increases in the global rankings expected to be seen in Asia Pacific countries.
Indonesia leads the way in 2021’s Asia Pacific rankings for real salary increases with a forecast increase of 3.8 percent. Significantly higher than the joint second-place nations of Singapore and Thailand, where the increase is expected to be 2.7 percent in comparison.
Workers in China will also see a recovery in the rates at which their salaries will grow in 2021. Workers can expect to receive a 5.0 percent salary increase on average next year – up from 3.8 percent in 2020.
However, real salary increases, which reflect increases in employee incomes after taking into consideration inflation rates, will be relatively low in Hong Kong in 2021, coming in at 0.6 percent after taking the forecast inflation of 2.4 percent for 2021 into consideration.
“Real salaries for Hong Kong residents will be amongst the lowest in the region. This compares unfavourably with expected rates of real salary increases across other parts of Asia Pacific, and may hinder the extent to which the Hong Kong economy may recover from the current recession,” added Quane.