Firms may limit wage hikes if prospects are dim, but should still pay bonuses if they did well: National Wages Council

SINGAPORE: Amid uncertainties in the global economy and the cost pressures faced by businesses, employers who have done well but face uncertain business prospects may moderate built-in wage increases for workers, the National Wages Council (NWC) said on Tuesday (Nov 11).

However, they should still reward employees with variable payments like bonuses and one-off payments, the tripartite body said in its wage guidelines for December 2025 to November 2026.

Conversely, employers who have not done well may exercise wage restraint “with management leading by example”, the council recommended. If business prospects appear positive, they should consider setting out future bonuses linked to “appropriate business indicators”.

“Wage growth should be in line with productivity growth,” said the council, adding that employers are encouraged to reward employees with wage increases that are “fair and sustainable” and to share the profits and gains from labour productivity improvements.

Unlike previous years, NWC’s latest annual benchmarks aimed at guiding employers on pay increases took into account the global economic headwinds linked to tariff measures by US President Donald Trump’s administration.

Mr Peter Seah, the NWC chairman, said at a press conference that the council discussed the potential downside risks posed by uncertainties in the global economy when formulating the latest guidelines.

The council noted that Singapore’s GDP growth is projected to continue slowing for the rest of the year, with weak manufacturing growth ahead as the US tariffs affect demand in global markets.

Softening global trade is also expected to lead to modest growth for the wholesale trade sector and a slowdown in demand for shipping and air cargo services, putting a drag on the transportation and storage sector.

Consumer-facing sectors are expected to stay lacklustre partly due to a continued shift in locals spending more abroad, added the council.

The government has accepted the recommendations, said Ministry of Manpower (MOM) permanent secretary Ng Chee Khern. The new guidelines will take effect from Dec 1, 2025 to Nov 30, 2026.

Mr Ng, who is retiring on Dec 1 after serving 41 years in the public service, also highlighted the guidelines by the council to uplift wages for lower-income workers.

“We agree that the wage guidelines must allow for meaningful increments for workers, and at the same time, be sustainable for businesses,” he said.