EMPLOYEES here can expect higher salary increases next year, according to a survey.

Global consultant Mercer's Total Remuneration Survey forecasts average salary increase (including in companies that have freezed salaries) would be 3.2 per cent next year, up from 1.9 per cent this year. This is, however, still lower than last year's actuals.

Companies throughout Singapore have struggled to contain HR-related costs over the past 18 months, resulting in workforce reductions and salary freezes across the board.

However, as the economy starts to show signs of recovery, this looks set to change, said Mercer.

"Significantly fewer organisations plan to freeze salaries in 2010, compared with this time last year," said Mr Puneet Swani, Asean business leader for Mercer's information product solutions.

"While this year's challenging economic conditions drove 35 per cent of employers to freeze salaries, just 15 per cent are planning to do so next year."

Mr Swani further stressed that organisations would have to make some tough decisions over the coming months.

While employee expectations have increased for the coming year, salary-increase budgets might not have increased by the same degree. Companies will need to use their limited budgets in differentiated ways to retain top performers.

The pharmaceutical industry reported the highest level of increase at 4.1 per cent, followed by consumer goods and aerospace at 3.4 per cent and 2.8 per cent, respectively. Conversely, the real-estate, electronics-manufacturing and banking industries had the lowest increases at 1.5 per cent or less, the survey found.

As for hiring, four out of 10 participants in the October survey said they are looking to add headcount over the next 12 months.

Less than 5 per cent plan to reduce headcount, while the remainder plan to maintain the same headcount as last year's.

The industries with the highest voluntary turnover rate include high-tech (14.8 per cent), followed by broadcasting (13.8 per cent) and banking (13.5 per cent). The electronics-manufacturing industry experienced the most retrenchment (6.2 per cent).

The survey assessed salary trends of more than 600 organisations across 11 industries in Singapore.

An additional snap poll by Mercer asked participants about the changes their companies have made to their benefit programmes this year, and whether these achieved the desired outcomes.

Some 30 per cent of respondents said their companies had made changes to their benefit plans this year. Of these, 70 per cent reported that the changes had achieved at least some of their desired outcomes, while 3 per cent said it was still too soon to tell.

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