According to a recent poll by Answers.sg with 1,548 respondents, 62% said they do not receive a 13th-month bonus.
This finding highlights a notable trend in compensation practices in Singapore.
The 13th-month bonus, also known as the Annual Wage Supplement (AWS), is not compulsory in Singapore — unless stated in a contract.
Although specific data on the percentage of companies offering the AWS is not publicly accessible, the latest survey by the Ministry of Manpower reveals that about 65% of firms include an annual variable component in their pay structures.
Source: Ministry of Manpower
The absence of a guaranteed annual bonus, often regarded as a cornerstone of traditional employee benefits, may point to evolving workplace dynamics and differing approaches to rewarding employee performance.
The 13th-month bonus or AWS, often equivalent to an extra month’s salary, is a common benefit in Singapore.
It is a single annual payment on top of an employee’s total annual wage.
The AWS serves as a financial boost for employees, typically disbursed at the end of the year. For many, it’s a means to cover holiday expenses, settle debts, or save for future needs.
In companies where the 13th-month bonus is provided, it’s viewed as an acknowledgment of employees’ contributions throughout the year.
However, in some other companies, its provision depends on company policy or profitability, leaving a significant portion of employees without this additional compensation.
According to the Ministry of Manpower (MOM), the AWS is not compulsory. Payment depends on what is in your employment contract or collective agreement.
Employers are encouraged to give their employees AWS to reward them for contributing to the company’s performance.
In a related poll, 81% of the respondents indicated that the 13th-month bonus is important to them. Only 11% said that it wasn’t important while the remainder were unsure.
For many employees, the 13th-month bonus represents more than just extra cash — it’s a symbol of appreciation.
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37-year-old Low Sin Ting told MS News: “While AWS is not mandatory in Singapore, I think most companies offer that and it has somehow become an expectation for employees.”
As inflation and living costs rise in Singapore, additional financial support can significantly ease burdens.
Employees often earmark their bonuses for:
Mr Low, a senior marketing manager, added: “Personally, I have been fortunate to have enjoyed this bonus throughout my career thus far and it usually serves as my family holiday and insurance fund.”
Without this bonus, some employees may feel financially strained, leading to decreased morale and productivity.
Joseph Peh, 43, shared with MS News: “I used to work for a Japanese electronics company which didn’t give out 13-month bonuses. I felt like I was short-changed during the five years I was there.”
Mr Peh, who has since pivoted to the healthcare industry as a field specialist, continued: “What made it worse was that the performance bonus was only 0.5 months.”
Performance bonuses typically fluctuate based on employee input and company financials, while AWS is a fixed amount.
Employers who do not provide a 13th-month bonus often cite financial constraints as the primary reason.
For SMEs, in particular, allocating funds for such bonuses can be challenging, especially in competitive markets or during economic downturns.
However, experts suggest that even when a full 13th-month bonus is not feasible, employers can explore alternative forms of recognition. These might include:
Lawrence Tan, 45, a managing director of a food processing company in Singapore, said: “At our company, we believe in giving out 13th-month bonuses as a form of encouragement and to reward employees for their hard work throughout the year.”
“For the sales team, we also give performance bonuses on top of the 13th-month,” Mr Tan added.
The absence of a 13th-month bonus highlights broader concerns about employee benefits and retention.
Competitive compensation packages are crucial in attracting and retaining talent.
While salary remains a primary factor, additional perks like bonuses, flexible working conditions, and wellness programs significantly influence job satisfaction.
In today’s labour market, where employees are increasingly vocal about their expectations, companies that prioritise employee welfare tend to have a competitive edge.
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Offering a 13th-month bonus or similar benefits can enhance an organisation’s reputation, fostering loyalty and reducing turnover rates.
When approached, Kazann Lim, a HR-practitioner with 20 years of experience, shared her insights with MS News: “In my years of employment, bonuses have been variable-focused, and this approach drives performance and productivity.”
When asked if the AWS is a factor when it comes to talent acquisition, Miss Lim, 43, said: “I don’t think it is an issue as there are many other factors such as overall employment benefits that include family care leave, flexible working arrangements and medical insurance coverage, amongst others.”
This appears to be in line with a survey commissioned by Prudential Singapore, which found that 85% of Singaporeans prioritise health over wealth.
72% of the respondents seek flexible working hours from employers whilst 60% hope the government implements healthy work-life balance policies.
The poll’s findings underline the importance of open communication between employers and employees.
Companies should regularly review their compensation packages and explore creative ways to acknowledge their workforce’s contributions.
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Transparent discussions about compensation expectations can pave the way for mutual understanding and innovative solutions.
As the debate around the 13th-month bonus continues, one thing is clear: A well-compensated and appreciated workforce is a productive and loyal one.
Looking ahead, employers and employees must work together to strike a balance that ensures financial stability and workplace harmony.
Also read: Taiwanese shipping company Evergreen gives employees average 20 months’ salary as year-end bonus
Have news you must share? Get in touch with us via email at news@mustsharenews.com.
Featured image by MS News for illustration purposes only.
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