Employees to Singapore companies: It's bigger bonuses or goodbye

50% of Singapore companies are scrambling for ways to retain employees as 67% of them report of increasing attrition rates in 2010 due to employees being pirated by competitors offering more attractive salary packages.

According to Ambition’s latest recruitment market survey for 4Q, the market is seeing a much higher level of attrition for H210, with employers struggling to hold on to their best employees through offers of bigger bonuses and higher salaries.

It noted, however, that with Christmas fast approaching, companies can expect employees to stay—if only for the Christmas bonuses.

“The run up to Christmas offers some reprieve as employees wait for their bonus payout (normally in February/March time), but given growth is firmly on the agenda through 2011 for over 70% of respondents, [the piracy] trend is set to continue,” the recruitment specialist said.

Ambition said the increased attrition rate, coupled with the difficulties of attracting high caliber talent in a talent short and hugely competitive market like Singapore is possibly the greatest threat to business growth, but conceded that not all companies can afford to raise salaries to keep their employees happy.

“We expect most companies will offer a salary increment of between 2% and 6%, butbased on our previous survey, candidate’s switching jobs will get an average increment of between 8% and 15%. It would be unrealistic and indeed unsustainable for companies to offer all employees salary increments of this size, so there needs to be a focus on retaining people through training, development and career progression,” said Paul Endacott, Managing Director, Singapore.

Endacott said that training, development and career progression are keys to employee retention apart from luring them with cash.

“It is encouraging that the vast majority of employers are paying out salary increments and bonuses this year based on improved business performance. Nevertheless, given that the overwhelming reason employees have given for changing jobs is the lure of more attractive remuneration packages, employers need to focus on retaining their best people,” he said.

The survey of more than 450 respondents from across Asia also revealed that in Singapore, only 2% of respondents indicated that there would be no salary increment, whilst  86% of respondents indicated that salary increments would be 2% to 6%.

Ambition said that it is  likely that the market will see an increased number of employees receiving a bonus this year, with 69% of respondents stating that the average employee can look forward to a bonus of up to 20%. At the Director level, meanwhile, 39% of respondents indicated that bonuses would be up to 20% and 24% even indicated that bonus payouts could exceed 30%