According to the survey conducted by global management consultancy Hay Group, the three sectors with the highest salary increases are banking and financial services (7 per cent), transportation (4.9 per cent) and fast moving consumer goods (4.6 per cent).

Actual average salary increases of bankers are 4.4 per cent for 2011, and average salary increases for 2012 are forecasted to remain at 4.4 per cent.

The survey was conducted in September 2011, covering over 480 Singapore-based companies (local and foreign-owned) from both the private and public sectors. It draws a line under research published in September by recruiter EMA Partners International, which showed that private bankers in Singapore may get paid nearly twice as much as their equivalents in Switzerland, published here. The battle to lure the most experienced, best-connected private bankers with the biggest books of clients is fierce in Asia, which has one of the world's fastest growing pool of millionaires. Many private banks are paying over the odds for talented staff, driving up compensation levels in the region. 

The survey confirmed this, saying that talent retention is firmly on the agenda for companies, with 88 per cent of surveyed organisations looking into retaining and engaging their workforce.

"Traditionally, the market trend around actual and forecast for salaries indicates a higher salary forecast for the following year. This time around, we've observed that the forecast is stagnant. Although the outlook for 2012 is less optimistic, the tight labour market in Singapore will nevertheless ensure that salary increments remain positive,” said  Victor Chan, regional general manager (Singapore and ASEAN) for productized services at Hay Group.

Senior staff are winners

In terms of bonuses, the report showed that the actual average variable bonus (i.e. performance-based bonuses excluding annual wage supplement, contractual bonuses) is 2.7 months for a 12-month period. This is slightly more than the average of 2.3 months in 2010.

Senior management will have something to cheer about this festive period, receiving the highest average bonus payout of 3.6 months. Middle management will look forward to 2.8 months, the second highest average bonus payout, while junior professionals and clerical support will receive an average bonus payout of 2.4 months and 2.2 months respectively.

The forecast average variable bonus payout is 2.7 months for the coming 12 months.

Cautious hiring plans

As a reflection of the ongoing uncertainty in the world, only 46 per cent of the surveyed organisations plan to increase staffing levels by five to 10 per cent, compared to 62 per cent this time last year.

According to the report, the employee group in high demand are technical specialists (62 per cent) and junior professionals (47 per cent). Middle management is seeing the highest cutback among the groups at 35 per cent.

Going by job functions, the main focus of recruitment is on engineering (30 per cent), sales (29 per cent), finance & accounting (27 per cent) and administration/support service (27 per cent).

Hay Group said that for companies to thrive in the current global economic uncertainty, companies have to differentiate their reward and employee engagement initiatives for high-performing talent.

"In light of the subdued economic outlook, companies are looking once again at how to do more with less. Hence, having employees who are willing to go the extra mile is critical for business success. However, their discretionary efforts will be wasted if companies do not support them for success e.g. by removing red-tape, providing adequate resources. Otherwise, their additional efforts will not translate into business results," said Chan.