By Joyce Hooi

BUSINESSES in the region believe prospects are looking up for 2010, but are pulling those purse strings taut.

According to a Pulse survey in November by Hewitt Associates, 70 per cent of firms in South-east Asia indicate an improvement in business outlook, but 50 per cent of respondents will be sticking to their salary budgets from H1 2009. The continued caution might have been reflected in how 47 per cent and 48 per cent of Singaporean and Malaysian respondents respectively stated that they were 'worried but still doing fine' where 2009 had been concerned.

On the salary-increase front, local employees will have a compelling reason to ring in the new year. Forty-four per cent of respondents in Singapore said that 2010 would see higher salary increases, compared to 31 per cent for Malaysia and 37 per cent for Thailand.

This piece of upbeat news, however, does not extend to bonuses. Of the three countries, Singapore had the lowest proportion of respondents who will be planning higher bonus payouts next year - 21 per cent.

In fact, 31 per cent of local businesses are thinking about lowering slightly the variable bonuses, compared to 11 per cent in Malaysia. Jobseekers too might have to spend additional time pounding the pavement in 2010. Only 17 per cent of local firms said that they will be increasing headcount across all levels compared to 24 per cent of Malaysian and 30 per cent of Thai respondents.

Even so, employee turnover is expected to increase across the region in 2010, and top-notch employees may expect the deal to be sweetened for them, specifically.

While only 11 per cent of local firms in Singapore saw a slight increase in turnover in 2009, 71 per cent of them expect to see employee turnover increasing in 2010.

'Today, organisations are pressured to retain their key employees and high performers in whom they have made significant investments in a tough year like 2009,' said Samir Bedi, solution leader of Hewitt's performance consulting practice in South-east Asia.

'2010 is when they should be realising the full potential of their investments which can only be possible if they can retain their talent. We are entering a battle for talent in the new year and must approach it with a fresh energised outlook to manage talent.'

Top performers in Singapore can expect more learning and development opportunities from their employers, according to the survey. Forty-two per cent of local respondent firms will also be reserving a portion of the firm's salary-increase budget for the chosen few.

The survey, conducted last November, included 170 respondents from the region, 31 per cent of whom were based in Singapore.

This article was first published in The Business Times.