Things to consider when wondering how much of a salary hike to expect when changing jobs
In today’s competitive job market, companies appear to be seeing more leavers than joiners. In the era coined ‘The Great Resignation’, employers are grappling with unprecedented turnover. With LinkedIn citing that 93% of organisations are concerned about employee retention, it comes as no surprise that employees are more inspired than ever to change jobs.
Further research by LinkedIn reported that 34% of Singaporean professionals have no intention of staying with their current employers for more than a year. Like many of your fellow workers, you may be contemplating whether it’s time for a change. From lack of stimulation to lack of career progression, unfair pay to unfavourable health outcomes, there are a wide range of factors that drive employees to seek out greener pastures.
Naturally, new opportunities will require you to consider the crucial factor of salary, begging the question of whether your pay should increase and, if so, how much salary hike to expect when changing jobs.
This blog will explore the key factors that influence salary expectations, offering guidance on how to gauge an appropriate pay increase when starting a new job in Singapore. We’ll also review the concept of moving laterally to unlock new opportunities and propel your career forward.
The current climate
At the end of 2022, Mercer projected Singapore’s voluntary turnover rate at 15.2 per cent, surpassing pre-pandemic levels of 12 per cent. Earlier this year the Ministry of Manpower’s labour market report revealed that the average monthly resignation rate in Singapore edged up to 1.8 per cent in the third quarter.
The reality is - money talks in this climate of elevated inflation and rising costs of living.
While Singapore’s core inflation remained unchanged at 5% in April, companies remain cautious when it comes to inflation induced salary increases. Mercer’s Total Remuneration Survey (TRS) forecast that 2023 salaries in Singapore will only increase by 3.75% on average. At lower than 5 per cent, this figure barely offsets inflation, meaning that employees will actually face a pay cut as things get increasingly expensive.
With only 22% of Singapore organisations increasing budgets to combat rising inflation, and another 45% making no adjustments at all, the outlook can seem less than encouraging. The fact of the matter is, significant salary increases are often more likely when you switch jobs as opposed to staying in your current position.
But, before you make the leap, or, before you worry that you’ve leapt prematurely, it’s important to understand how much salary hike to expect when changing jobs so you can set realistic expectations and make important career decisions.
Navigating the salary switch
There are several factors that can influence the salary hike that you can expect when changing jobs.
Gina Chia says, division director at Robert Half Singapore says, “it’s widely accepted that professionals can expect an average salary increase of around 10 to 20 per cent when transitioning to a new role. That said, certain circumstances and conditions can command a higher increment increase.”
These include:
- Industry and Demand – the scarcity of talent in booming industries such as tech and finance, can increase a company’s willingness to make a compelling offer.
- Expertise and Experience - professionals with coveted skills, extensive knowledge and a proven record of success, demonstrate valuable contribution potential, which ultimately justifies a higher salary offer.
- Education and Qualifications – With higher levels of education and specialised certifications comes a greater likelihood of an attractive salary for the candidates who possess them.
- Market Conditions – Our current skills short market favours candidates. With the competitive market and low unemployment rates comes greater leverage to negotiate a higher salary.
While the above factors can put candidates in a more advantageous salary position, the degree of salary increases hinges largely on their ability research and negotiate.
Market Research
Market research is fundamental when it comes to how much salary hike to expect when changing jobs. Taking the time to do your own research will allow you to assess how your salary offer fits in the context of the wider market.
The Robert Half 2023 Salary Guide offers comprehensive salary data and insights to help you determine whether your offer is within the market range for your experience and position level. If the offer is below the market averages or, if you feel you are worth more, it’s important to justify this to your prospective employer to ensure you receive fair and competitive compensation.
Comprehensive market research helps to set realistic salary expectations during the job search and negotiation process.
Related: How to ask for a pay rise
Salary Negotiations
When it comes to changing jobs, it’s essential to negotiate your salary increase effectively and strategically.
Knowing how to advocate your worth and justify a salary increase is the key to a successful outcome.
Related: How to negotiate a higher salary offer for your next job interview
Support your request for a higher salary by:
- Keeping abreast of industry standards
- Communicating confidently and concisely
- Highlighting your achievements
- Outlining professional growth and development
- Emphasising your future value
- Committing to collaborative communication
- Remaining polite, positive and professional and,
- Not revealing your salary history or expectations prematurely
Related: How to best answer: "What is your current salary?"
What if my pay doesn’t go up?
While job changes often come with a salary increase, it’s important to understand that this is not guaranteed with every transition.
There are multiple factors that can influence whether your salary will increase or, remain the same when changing jobs in Singapore.
1. Supply and Demand
In situations where the market is saturated with talent for a particular industry or role, companies have less incentive to offer major salary increases. An oversupply of talent leads to more competition between candidates and a reduction in competitive offers from businesses.
2. Corporate Budgets and Compensation Programs
The degree to which a company can increase new hire salaries is generally guided by internal budgets. These constraints, along with factors including; company size, financial performance and existing salary ranges, will all dictate the viability of a salary increase. In some cases, companies may prefer to focus on non-monetary compensation over salary. This might include; career growth opportunities and additional annual leave entitlements.
3. Market Value Awareness and Negotiation
As explained, your negotiation skills and market value awareness is critical when it comes to how much salary hike to expect when changing jobs. If you are unprepared in your research or, if you are not proactive when negotiating, it can hinder your efforts to showcase your value. Inability to articulate your skills and negotiate in relation to salary benchmarks, may see you accept an offer that doesn’t align with your expectations.
Related: Salary negotiation in Singapore - 3 tips to prepare yourself
4. Non-Financial Benefits
While salary is a major factor when changing jobs, it’s vital to consider the value beyond salary. Carefully evaluate the package as a whole and assess whether there are any additional benefits that form the best complete package for you. A lower base salary may actually be offset with benefits and non-financial factors that could enhance your overall job satisfaction and personal wellbeing. This might include: health insurance, flexible work arrangements and retirement plans.
5. Skill Set and Job Requirements
The potential for a significant salary increase may be limited by your existing skill set. While your skill set may align with the job requirements, employers may prioritise candidates with specialised skills or experience. Professional growth and development is key to increasing your value and your bargaining power. While a pay increase may not always be viable if you’re transitioning to a similar role, lateral movement can lay the foundation for long term career success.
The Art of Moving Laterally
Gina says, “promotions and salary increases aren’t the only pathways to career success. It’s not just about upward mobility - moving laterally, can be equally beneficial for your career development.”
By embracing lateral movements, you are well poised to unlock new opportunities, enhance your market value and drive your career forward by:
1. Broadening your skill set
New challenges and responsibilities arise with exposure to new teams, departments and business functions. This diverse skill set enhances your versatility, making you a more valuable asset to current and prospective employers. Furthermore, a well-rounded skill set makes you a more viable candidate for higher-level positions in future.
2. Building a Diverse Professional Network
Lateral moves generate increased networking opportunities, new connections and fresh perspectives.
A diverse network of professional contacts allows you to gain exposure to various cultures, workplaces, and insights while boosting opportunities for collaboration, mentorship and new career pathways
A diverse network is fundamental to career advancement, adding to one’s appeal within the Singapore job market.
3. Enhancing your Marketability
A lateral move can help to bolster your toolbox of skills, subsequently boosting your market appeal.
The professional landscape is ever-evolving and a lateral move can provide an opportunity to address skills gaps, work on weaknesses and develop new competencies to future-proof your career.
4. Demonstrating Adaptability and Agility
Adaptability and agility are highly desirable traits in today's fast paced job market.
Employers value candidates with a proven history of successful transition between different roles, responsibilities and industries. This versatility and unique ability to pivot, is what drives a candidate’s competitive edge and their ongoing relevance in the job market.
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In today’s current climate, employees are more determined than ever to secure a salary increase. With many questioning how much salary hike to expect when changing jobs, it’s crucial to understand how to navigate the various pay rise parameters when starting a new job in Singapore.
A solid understanding of the conditions that command an increase is vital, so to, is one’s ability to research and negotiate. While salary increases are not guaranteed, it’s important to recognise the relevant reasons and the associated opportunities. Embracing the potential of lateral moves can pave the way for a fulfilling career path that correlates with a sense of growth, adaptability and advancement.
Looking for advice on how to find a job or move your career forward? Check out Robert Half’s dedicated Career Advice Page
