SINGAPORE

Some are concerned that companies might use the impending CPF increase to offset any salary increment.

Mr David Ang, executive director of the Singapore Human Resource Institute, said: “We urge employers to pay according to performance and not to short-change their workers and executives who stayed with the organisation through difficult times and now hope to enjoy the fruits of their labour.”

Prime Minister Lee Hsien Loong on Saturday had announced the 1-point restoration of the employers’ CPF contribution rate — which would bring it to 15.5 per cent — over two stages, in September and next March.

To temper wage increases as a direct result of this would be short-term thinking on the part of employers, one analyst said.

Kelly Services Singapore managing director Mark Sparrow said: “Will every company comply (by rewarding workers) in the true spirit of the hike? Possibly not. But if organisations are looking to attract the best people and be competitive, I don’t think they can afford to take advantage of their employees — ultimately, it will show in their retention rates down the line.”

Mr Ang urged HR practitioners to take a pro-active role in establishing a robust reward system that ensures employees get a FAIR deal.

One way is for companies to work a monthly variable component into their wage policy, if they have not done so, noted president of the Association of Small and Medium Enterprises Lawrence Leow.

“Don’t worry about the 1-percent CPF increase because that is actually something that we have taken away from the workers. It’s only fair that we give it back,” he said.

Surveys done by several consulting firms prior to the announcement of the CPF hike had forecasted an average salary increase of 3 per cent this year.

Some had earlier wondered if a higher CPF contribution rate would offset the increased foreign- worker levy’s effect of discouraging dependence on foreign workers. Might companies be tempted to hire more foreign workers who are excluded from any CPF contributions?

Mr Sparrow did not think so.

“I think ultimately, most organisations would like to find local talent because of accessibility and because if you’re bringing foreign talent over, you will have hidden costs,” he said.

today

NEWS