THE tussle for talent has left companies here forecasting salaries will rise by at least 4.3 per cent on average this year, up from 3.9 per cent last year, according to a salary survey by HR consulting firm Mercer.

The highest increments are expected in the broadcasting and pharmaceutical & healthcare sectors, with companies forecasting increases of 4.6 per cent and 4.5 per cent respectively.

The bullish property sector, which has previously lagged behind other industries in salaries offered, is also reporting increases of 4.4 per cent in 2007, versus 3.6 per cent in 2006.

'With organisations fighting hard to attract and retain talent, companies appear to be adopting short-term approaches such as salary increases and variable bonuses rather than longer-term strategies,' said Verena Chua, deputy business leader for Mercer's information product solutions division.

Mercer's total remuneration survey covered over 500 businesses across 13 industries, covering the compensation trends for over 800 benchmark positions. It is also the largest such survey conducted in Singapore.

The survey also found that overall variable bonuses have been stabilising across all staff levels in all industries over a three-year period, with averages changing only marginally from 18.3 per cent in 2007 to a forecasted 19.1 per cent in 2008.

The property sector was again found to be forecasting above industry average variable bonuses, with companies predicting a 20.5 per cent bonus in 2008. The aerospace industry, with projections of 23.6 per cent bonuses in 2008, continued to have the highest levels of variable bonuses paid out.

In a comparison of the salaries of department heads across all industries, it was found that the finance and engineering heads were drawing the highest salaries. The high- tech industry was also found offering the biggest salaries for executive positions.

Mercer also found that with Singapore's increasing role as headquarters to various global companies, the salary differential between regional and country roles has also increased.

'Regional roles require a certain level of experience and exposure to other markets and skill sets, and are rewarded accordingly,' explained Ms Chua.

The survey concluded that with Singapore's strong economic growth, the key focus for organisations should be on attraction and retention strategies to curb escalating turnover rates. 'It's important to note that raising salaries are not the only factor to consider when trying to retain good staff, and may in fact lead to organisations becoming less commercially viable. Companies should review each employee on a case-by-case basis and reward accordingly,' said Ms Chua.

Companies were also encouraged to use other retention and attraction strategies, including employee communication, satisfaction surveys and reviewing benefits offered.

Flexible benefits were also cited as an effective retention tool as benefits can be personalised to differing life needs of employees.

Is this article useful to you?