More firms in Singapore were able to raise their employees’ wages in 2022 compared to 2021. Nominal wage growth in 2022 was at its highest in a decade, according to a report from the Manpower Research and Statistics Department, Ministry of Manpower.

Notwithstanding higher inflation, real wages continued to grow, but at a slower pace compared to 2021.

The data showed strong wage growth amid heightened manpower demand.

Nominal total wages (including employer CPF (pension) contributions) of full-time resident employees (Singapore Citizens and Permanent Residents) who had been with the same employer for at least one year rose by 6.5% in 2022.

The Ministry of Manpower’s data also found that the nominal wage increase in 2022 was significantly higher than in 2021 (3.9%), and the highest in a decade. This reflected the efforts by firms to restore wages of some employees who experienced wage cuts during the pandemic years, as well as give higher wage increases to other employees to retain staff amidst competition for workers.

At the same time, nominal wage growth kept pace with inflation, allowing real wages to grow in 2022. However, the pace of growth was significantly dampened. Real wages grew marginally by 0.4% in 2022, lower than the 1.6% in 2021.The report noted that the inflation rate was significantly higher in 2022 (6.1%) compared to 2021 (2.3%).

In 2022, all industries experienced higher wage growth compared to 2021. However, the magnitude of increase varied across industries. Accommodation and Retail Trade registered above-average wage increases (9.7% and 6.7% respectively), as firms in these industries raised wages to attract and retain workers amidst the strong recovery in tourism demand.

The sectors of Financial Services (9.0%), Information & Communications (7.7%) and Professional Services (7.6%) continued to register strong wage increases in 2022, alongside sustained manpower demand in these industries.

Firms in Manufacturing (5.7%) and Wholesale Trade (5.8%) also raised the wages of their employees, albeit to a lesser degree as a result of global supply chain disruptions and weakness in trade-related activities.

Meanwhile, the proportion of profitable establishments rose for the second consecutive year to 83.9% in 2022.As a result, the proportion of establishments which gave wage increases rose from 60.0% in 2021 to 72.2% in 2022, and was slightly higher than the pre-pandemic level in 2019 (69.2%).

Establishments which cut the wages of their employees remained the minority at 5.2%, and the remainder (22.6%) left wages of their employees unchanged.

Among establishments that gave wage increases, the magnitude of increase was larger in 2022 (7.9%) compared to 2021 (6.3%). Among establishments which gave wage cuts, the magnitude of wage cut was also smaller than the previous year (from -5.2% to -4.5%).