Mid-year bonus and its message
Civil servants will get a mid-year bonus of 0.45 of a month's pay this year, lower than the half-month payouts they received for the last two years.
The lower bonus is significant because it affects a large number of workers across various industries.
The reason? As Singapore's biggest employer with 84,000 workers, the civil service and its payouts are watched closely by the private sector as a guide for its own bonus payments.
But more importantly, the announcement on Tuesday by the Public Service Division (PSD) drives home the message that tougher times are ahead with a slowing Singapore economy. It also reinforces the signs economists have been flagging.
In the first quarter of this year, the economy grew by 1.8 per cent and is likely to continue growing sluggishly for the rest of the year.
This is cause for concern because the service sector, a key engine of growth, is in a slump. It grew at 1.4 per cent in the first quarter, the slowest pace since the 2009 financial crisis.
With a weaker global economic outlook, trade cannot be counted on to pull up growth either.
The Government has forecast growth of 1 per cent to 3 per cent for the full year. But private sector economists are predicting 1.8 per cent growth, down from an earlier forecast of 1.9 per cent.
In turn, employment growth has slowed.
The PSD has said that labour demand is expected to be uneven across sectors, and also warned of possible layoffs in some sectors as the economy restructures.
While the average worker may not immediately grasp the significance of the economic and employment figures, the lower mid-year bonus is a clear and early warning to moderate expectations. It will also help to drive home the need to stay relevant by learning the right skills.
For job-seekers, it is a wake-up call that there may be fewer openings. For companies, it is a sign from the Government that there is no need to shrink bonuses or salaries drastically for now, even as they take measures to deal with the economic slowdown.
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