WITH competition intensifying in a tightening labour market, tech companies in Singapore are now dangling larger cash carrots in the hope of attracting top talent to come on board.
According to a report on Q1 hiring expectations released last week by recruitment giant Hudson, 84 per cent of the respondents surveyed from the IT&T (information technology and telecommunications) sector said they are offering new hires salary increments of more than 10 per cent.
This is a sharp increase from 2007, where only 7 per cent revealed they were planning such pay hikes.
Seventeen per cent of those polled in this survey revealed they are even dishing out salary rises of more than 20 per cent, up from a mere 5 per cent in the same period last year.
These findings from the quarterly Hudson report are based on a poll of nearly 6,000 employment decision-makers across markets like Singapore, Hong Kong and China.
"Much of the demand is for IT professionals in financial institutions which are staffing regional or global operations hubs. With the shortage of candidates with financial IT skills, one of the easy ways for organisations to attract them is to raise salary and bonus," said Yeo Gek Cheng, Hudson's director of IT&T.
Beyond the technology segment, companies in other industries are also upping their pay scales for fresh recruits in varying degrees, with the banking and financial sector "being forced to pay the biggest rises", the report revealed.
While new hires can expect higher paycheques to start with, existing employees from most tech companies in Singapore will have fatter bonuses waiting at the end of this work year.
Forty-six per cent of IT firms said they intend to dish out discretionary bonuses of 20 per cent or more in 2008, up from just 6 per cent in Q1 last year.
In addition, 25 per cent of these firms intend to have bonus payouts of more than 30 per cent this year while none said so in 2007, Ms Yeo told BizIT.
Overall, Hudson expects hiring in the IT&T sector to remain strong, with 50 per cent of the respondents planning to add headcount in the current quarter.
However, the company said some tech firms which recruited actively to staff their global and regional hubs here in 2007 are now undergoing consolidation, but this is offset by projects like Singapore?s new broadband initiative which could spark competition for local IT professionals.
With greener pastures abounding, employers are now grappling with the bane of higher staff turnover. In particular, poaching was cited as the main reason for employee movement among local technology firms.
Thirty-eight per cent of respondents from the IT&T sector listed poaching as the cause of staff turnover ? the highest proportion across the six vertical industries covered by the report.
Besides this reason, "limited opportunities for career progression" was another major factor which pushed employees to jump ship.
"As this (IT&T) sector is experiencing strong growth, talented candidates can easily find new positions. In a hot market, salaries would only go one way - up," she said.
"Employers do, however, realise that there is no end to a price war and have started other creative measures within their remuneration plan such as sign-on bonus, retention bonus, a higher variable bonus plan, career training and development funds, and various types of allowances," she added.
