Singapore has highest C-level salaries in Asia Pacific

by Asia One Business

SINGAPORE – Salaries for senior management executives are up to 14 per cent higher than those in Hong Kong, a study has found. Salaries for top management executives are also 34 per cent higher in Singapore than in Hong Kong.

Not only is Singapore paying senior executives more than Hong Kong firms are, the Towers Watson’s 2013/2014 Global 50 Remuneration Planning Report also states that C-suite pay levels exceed those of other countries in the Asia Pacific region.

“Growth in private banking in Singapore and its development – or regeneration – as a regional hub for international companies has drawn a lot of high-level talent to the city and that’s reflected in the C-suite compensation,” said Sambhav Rakyan, Data Services practice leader, Asia Pacific at Towers Watson.

Towers Watson forecasts average salary increases in both centres to be 4.5 per cent this year.

The report revealed that Asia Pacific’s developed economies have the highest pay levels – Australia’s entry pay level is eight to 11 times more than China, the Philippines and Indonesia, and 15 times that of Vietnam. Australia also pays discernibly higher than Japan, Singapore and Hong Kong through to middle management, after which the gap narrows.

Pay levels in China lags that of Hong Kong across most of the job categories, but at senior management level – there is convergence. At top management, remuneration is 11 per cent more in China (US$215k) than in Hong Kong (US$193k), according to the Towers Watson report.

Salaries for senior management have risen in China over the past few years because of a shortage of talent at this management level. It means that top-level pay in China is comparable to that elsewhere in the world.

Opportunities in India

More eye-catching, however, is the comparison between China and India. Striking differences exist between the region’s two biggest labour forces. Based on the survey findings, labour costs for senior executives and top management is lower in India. At senior level, executive pay in China is more than twice that in India (US$94k).

For international companies, the sharp fall in the value of the Indian rupee against the US dollar in 2013 contributed to reducing labour costs in India. It contrasts with China where the renminbi appreciated against the dollar. The rupee is down around 12 per cent on the year, while the renminbi has risen almost 3 per cent.

“The large influx of Indian returnees following the global financial crisis helped India to get more CEO talent,” said Clare Muhiudeen, Managing Director, Talent & Rewards, Asia Pacific, Towers Watson. “But with higher rates of inflation in India than in China, that gap will narrow. We expect average salary increases in India to be higher than China’s 8.5 per cent. That said, India clearly has more affordable labour than China and that’s the way it’ll be for the foreseeable future.”

Other fundmentals have a bearing too. China’s labour force is expected to fall for the second year running to 795 million in 2014 from 798 million in 2013, while unemployment is forecast to be 6.1 per cent (6.4 per cent in 2013). In India, however, while unemployment is expected to fall to 8.4 per cent from 8.8 per cent in 2013, it remains well above that of China. Meanwhile its work force is set to reach 492 million this year, up from 487 million in 2013.

Better opportunities for Singapore professionals in 2014!

by Business Asia One

SINGAPORE – Companies across various industries are expected to increase training and development opportunities and chart clearer career paths for local professionals in 2014.

A new report done by recruitment consultancy Robert Walters also said that professional candidates who switch jobs can expect average salary increments of 15-20 per cent this year.

The Fair Consideration Framework, which will be implemented from August, will drive salaries of local employees up as firms compete to attract and keep top local talent, the report said.

While the emphasis on domestic hiring is expected to push salaries up across the board, managers may struggle to meet niche skill requirements.

Companies will have to be prepared to take on employees with transferable skills and develop them internally, the survey report said.

Toby Fowlston, Managing Director of Robert Walters Singapore, said that firms are investing more in existing employees with transferable skill sets as the competition for top Singapore talent has increased.

“This allows for more promotion opportunities from within and rewards employees with an expanded scope of responsibilities,” he said.

Professionals can expect to reap rewards in terms of career progression in 2014, he added.

Hong Kong may benefit from stricter Singapore policy on hiring of foreigners

by Phila Siu

Lion City seeks to favour locals in hirings under its ‘Fair Consideration Framework’; foreign professionals may now opt for Hong Kong.

Hong Kong and Shanghai may have lost out to Singapore in the hunt for foreign talent over the years, but manpower experts believe a reversal is looming as the Lion City tightens the rules on the hiring of staff from overseas.

Singapore’s Ministry of Manpower announced last September that under its new “Fair Consideration Framework”, companies would need to consider locals before hiring from abroad.

“These changes are part of a broader effort to ensure that good jobs continue to be created for Singaporeans,” said Tan Chuan-jin, acting minister for manpower at the time.

Starting from the first quarter of this year, companies with a disproportionately low concentration of Singaporeans at professional, managerial and executive level compared with other companies may be chosen for additional scrutiny.

Nick Marsh, managing director of recruitment firm Harvey Nash Asia Pacific, said over the years international companies and talented professionals had left Hong Kong and Shanghai for Singapore, mainly because of air pollution, limited school places and high rents.

“Lots of foreigners cannot get places in schools in Hong Kong. And they can get that in Singapore,” Marsh said. “The regular conversations you have with foreigners in Hong Kong is, ‘I have just had my rent hiked … 50 per cent’. It’s either they cannot afford to live here or this is so stressful. ‘I can go to Singapore and get an apartment for half the price’.”

Marsh said another factor was that the Singaporean government gives several years of tax breaks for companies setting up offices in the country.

Five years ago, firms in Hong Kong were offering full expat pay packages, but now at least half of foreigners are offered a “local plus” package, Marsh said.

Full expat packages include full housing and schooling allowances, together with flights back home twice a year. “Local plus” packages mean half the housing allowance and often only one flight home.

Full expat packages in Hong Kong are still slightly more attractive than in Singapore. But many people prefer Singapore because of Hong Kong’s air pollution, high rents and the difficulty in getting children into schools.

To give an example, a chief financial officer in Hong Kong earns a basic salary of about HK$2 million plus a HK$90,000-a-month housing allowance. In Singapore, the basic salary is HK$1.5 million plus a HK$60,000 housing allowance.

Marsh believes that Singapore’s curb on foreign talent could mean that international firms and expats will opt for Hong Kong and Shanghai.

Pauline Chung Hei-ching, president of the Hong Kong People Management Association, said companies may move away from Singapore if the policies made it difficult to hire the international talent they need.

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Locals First

Key points of Fair Consideration Framework

• From January, qualifying salary for a work pass for a foreign professional up from S$3,000 (HK$18,350) a month to S$3,300

• Firms will be subject to additional government scrutiny if they have disproportionately low concentration of Singaporeans at senior levels, and receive repeated complaints of nationality-based or other discriminatory HR practices

• From August, companies with more than 25 employees must advertise vacancies on a new jobs bank to be run by the government. Ads must be open to Singaporeans and run for at least 14 calendar days.