Expat versus local salaries in Singapore

Several recent media reports have explored the issue of expat salaries and asked if expats are really receiving as much as you think they are. In our experience, few expats in Singapore today are on the inflated packages of the past.

In fact, most employers have localised salaries for expatriates. So while most companies still hire expatriates, they are considered equally with local candidates and are offered a local package.

Multinational corporations go one step further and many categorically state that expatriates are not paid differently to local workers. Today, it is the skills and experience of candidates that decides their level of compensation.

Many years ago expat packages were used to attract foreign workers with specific skills, but as Singapore now has an international reputation as a great place to live and work, employers no longer need to entice expats with generous packages.

So how are local workers being paid? According to our Hays Asia Salary Guide a total of 59 percent of employers in Singapore rewarded their staff with a salary increase of 3 to 6 percent in 2014. In 2015, 54 percent of employers in Singapore plan to increase salaries by 3 to 6 percent, and 13 percent will offer a pay increase above that level.

Bonuses based on performance are also being used to reward top talent. In addition, most employers (83 percent) continue to give their staff benefits which include health (61 percent), car or car allowance (40 percent), and life assurance (37 percent).

The Fair Consideration Framework has yet to have any significant impact on pay structures in organisations as it specifically applies to positions that pay less than S$144,000 per year. The government regulations were implemented to help ensure that local workers were considered by employers first before approaching foreign workers.

However, skills and experience will remain the focus for employers when hiring both local and foreign workers for more senior positions.

If Singapore is to remain competitive in the global business environment companies will still need to look overseas if local candidates don't meet the requirements of employers. Many companies are willing to pay a premium for these highly-skilled staff who are in short supply – but not to the extent they once did.