Business groups welcome move to raise local retail staff's wages but say added cost a concern

SINGAPORE- Raising the wages of local retail staff is a welcome move, but taking on more costs will likely be a concern amid the challenging business operating environment, business associations said on Monday (Aug 15).

This comes after a slew of recommendations announced by the Tripartite Cluster for Retail Industry (TCR) on Monday under the Progressive Wage Model (PWM) in a move to boost low wages in the sector.

The wage increase will see local workers getting salary increases of 8.4 per cent to 8.5 per cent annually, from Sept 1 this year up to Aug 31, 2025.

Singapore National Employers Federation executive director Sim Gim Guan said the wage growth may help to attract part-timers and meet the sector’s manpower needs.

But with the higher business costs that employers are already facing due to factors such as inflation, they would be concerned about absorbing costs or passing them on to consumers as this would affect their competitiveness, he said.

Support measures from the Government, such as the Progressive Wage Credit Scheme, will hopefully help to mitigate the impact of the wage increases.

The Singapore Retailers Association (SRA) said the wage increases will help to make the sector a more attractive career choice.

But labour costs have risen substantially even before the implementation of the PWM, said SRA executive director Rose Tong.

With employers having to pay a minimum wage, competition for local workers will also become more intense, adding to the difficulty in finding local workers.

Ms Tong added: “It will also be more expensive for smaller retailers, such as neighbourhood shops, to hire. Those who pay more with better employer branding and staff benefits will be better positioned to attract retail talents and retain existing staff.”

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Bigger retailers, such as fashion chain Uniqlo, have already taken steps to boost staff wages to attract and retain talent.

Uniqlo Singapore’s human resource director, Ms Juliana Tan, said the company had bumped up all its store employees’ salary by an average of 23 per cent to 25 per cent in June. It has about 1,200 Singaporean and permanent resident employees islandwide.

The PWM will help to keep the sector attractive to locals, but the fashion chain has also put in place training opportunities for its staff, she added.