SINGAPORE: The National Wages Council (NWC) has called on employers to provide fair and sustainable wage increases to their employees, a move emphasizing the correlation between productivity growth and the improving economic landscape in the upcoming year. The recommendations were outlined in their wage guidelines for the period from December 2024 to November 2025, announced on Thursday (Oct 10).

With an optimistic economic outlook and anticipated moderation in inflation rates for 2024, employers that have performed well should consider granting both built-in wage increases and variable payments, the council advised. Conversely, those facing challenges should demonstrate wage restraint, with a directive for management to lead by example in this effort.

K Thanaletchimi, president of the National Trade Union Congress (NTUC), clarified that the absence of a one-off payment, unlike the previous year, reflects a distinct expectation for companies experiencing success to reward their workforce through bonuses or similar variable components.

Peter Seah, chairman of the NWC, affirmed the importance of rewarding employees as a means to boost retention, particularly when their productivity has contributed to the company’s success.

Targeted Increases for Low-Wage Workers

In a significant move aimed at supporting lower-wage workers, the NWC has proposed a wage increase of 5.5% to 7.5%, equating to a pay rise of at least SGD 100 (USD 76.42) to SGD 120. Employers in a favorable position commercially should aim for increases at the higher end of this spectrum, while those facing uncertainty may opt for smaller increments.

Lower-wage workers, defined as those earning a gross monthly wage up to SGD 2,500, make up approximately the 20th percentile of full-time residents in Singapore.

The NWC also advised full implementation of the flexible wage system, which encompasses both annual and monthly variable components, enabling businesses to swiftly adjust wages in response to economic fluctuations to maintain employment and retain talent.

The Ministry of Manpower (MOM) has expressed its support for the NWC's guidelines, encouraging employers to make equitable wage adjustments reflecting both company performance and the overall economic climate. Permanent Secretary Ng Chee Khern highlighted that certain sectors, notably information and communications as well as manufacturing, have exhibited strong productivity growth, while others, like food and beverage services, need to accelerate their transformation efforts.

Statistics revealed that during the past year, 62.3% of well-performing firms implemented significant wage increases and provided variable payments, while 73.8% of those with uncertain prospects also managed to give annual bonuses.

The Singapore National Employers Federation (SNEF) has backed the NWC's recommendations. President Tan Hee Teck emphasized the necessity for wage growth to align with productivity gains to avoid rising business costs that could jeopardize employment opportunities.

Adding to the public discourse on wage increases, Ms. Thanaletchimi remarked on the pressing issues workers are facing due to heightened living costs, suggesting that the NWC guidances address the needs and struggles of employees effectively. She expressed hope that employers will exhibit generosity in the granting of salary increments and bonuses, especially for middle-income earners as indicated in the updated guidelines.

As Singapore navigates its economic recovery, the call for fair and sustainable wage increases is seen not just as a financial measure, but as a vital step in ensuring the well-being and morale of the workforce.