By Gabriel Chen

MANY employers here are freezing salaries or lifting them only marginally this year, according to a recent poll by global consulting firm Watson Wyatt.

The survey, which polled more than 1,600 organisations in 11 economies, found the trend in Singapore in line with that of many Asia-Pacific countries as the downturn causes firms - big and small - to be more cautious about dishing out higher wages to employees.

In Singapore, where about 85 companies were polled, 25 of them had frozen salaries for this year. In more than half of the cases, the decision to do so was made by global headquarters.

'The labour market has changed considerably, reflecting the rapid deterioration of Asian economic growth,' said Mr Russell Huntington, Asia-Pacific director of Watson Wyatt's Human Capital Group. 'Companies now see no need to increase salaries aggressively. Indeed, many take the opportunity to freeze salary costs.'

This is particularly so in locations where businesses are much more exposed to the slowdown in global trade, such as Hong Kong, Japan, South Korea, Taiwan and Singapore, he said.

The survey, which was conducted from Feb 1 to March 15, also showed that the budget for salary increases in Singapore has also dropped sharply from 5.3 per cent in July last year to 2.1 per cent in March this year.

By comparison, the budget for salary increases for companies in Hong Kong shrank from 5 per cent to 1.9 per cent.

Significant reductions were also seen in mainland China (9.8 per cent to 5 per cent), Indonesia (12.8 per cent to 8.6 per cent) and the Philippines (9.5 per cent to 5.4 per cent).

The data also broke down anticipated salary increases across industry sectors. In Singapore, for example, energy and power firms are tipping a pay rise of 3.1 per cent this year.

Chemical companies were the next most generous, anticipating a salary rise of 3 per cent. This was followed by firms from consumer products and fast moving consumer goods at 2.8 per cent.

Last on the list among those polled were telecommunications firms, which are counting on a 0.7 per cent rise in pay.

Mr Mark Ellwood, managing director of Robert Walters, a human resources consultancy, said that in terms of salary increases this year, it will be 'fairly nimble across the board'.

'Within financial services, for example, what you'll see is there have been redundancies and those people still staying will see their total compensation affected,' Mr Ellwood said.

On Wednesday, Singapore's National Wages Council reminded employers to stick to the recommendations that it had issued six months ago - to reduce pay or freeze wages before laying off workers.

Already, many companies have implemented wage cuts or frozen salaries in the face of daunting economic conditions.

For example, United Overseas Bank and OCBC Bank have frozen wages, while contract electronics manufacturer Venture Corporation has implemented pay cuts of 10 per cent to 20 per cent for senior and middle management.

This article was first published in The Straits Times.