Remuneration package: components and negotiation tips

Mercer's 2023 Total Remuneration Survey brought good news for employees in various sectors. It projected a 5.1% salary increase for 2024. Knowing this lets you make informed decisions about your current and future employment. You can also negotiate a competitive compensation package.

A well-negotiated salary package can impact the course of your working life. It ensures you receive fair compensation for your work and provides financial stability and security. It can also play a significant role in your commitment to the company.

Feeling valued makes you more likely to perform at your best and excel at work. This can lead to promotions and career growth.

We explain remuneration packages and provide valuable insights into how to negotiate them. Here's what we'll cover:

• What is a remuneration package?
• Components of a remuneration package
• How to negotiate your remuneration package
• Conclusion
• FAQs

What is a remuneration package?

This means the total remuneration package and benefits employers provide​ to employees. This includes the base salary, wage, and other incentives, such as cash bonuses. It also encompasses the non-cash benefits that companies offer their employees, such as insurance and shareholders' equity.

Employers often provide details of the compensation package during the hiring process. They use them as a tool to attract and retain employees. If the package doesn't meet your expectations, you can negotiate for better terms or look for another job.

Businesses often conduct a yearly review of their employees' compensation. This helps them determine whether their workforce is receiving fair and competitive compensation. During this time, they may adjust your package based on your performance and qualifications or to reflect current market rates.

Components of a remuneration package

Your remuneration package consists of different types of remuneration: direct and indirect compensation. Let's take a look at each category:

Direct compensation

This covers all monetary payments you receive from your employer. It includes the following:

1. Salary

Your salary is a fixed amount your employer pays you for your work. You typically receive it every month or every week.

2. Hourly wages

Some roles, especially part-time or contract positions, are paid hourly. Singapore's competitive wage structure reflects its economic environment.

3. Commissions

Commissions are performance-based cash incentives that encourage productivity. They're a common form of direct compensation in various industries with sales positions. Commission pay is typically a percentage of your total sales or a fixed amount for every unit you sell.  

4. Bonuses

Additional bonuses are typical, particularly during festive seasons like the Lunar New Year, where many companies offer '13th-month bonuses' or other incentives.

Indirect compensation

This includes all non-monetary benefits you receive apart from your salary or wage. Here's a list of common examples:

1. Health and life insurance

These add to your financial security. Health insurance can include medical, vision, and dental care expenses. Life insurance provides financial support to your beneficiaries in the event of your passing. Coverage depends on the plan your employer subscribes to.

2. Paid time off

Singaporean companies offer paid leave, including annual, sick, and maternity/paternity leave. The statutory minimum leave is 14 days, but many companies offer more based on seniority.

3. Retirement plans

The Central Provident Fund (CPF) is a mandatory savings scheme in Singapore, with contributions from both employer and employee. It’s crucial for retirement planning.

4. Company car benefit

This provides you with a vehicle that the company owns or leases for you to use for business. You may also be able to use it for personal purposes. Some companies offer a company car benefit where they finance the vehicle and cover its maintenance and insurance costs.

In this case, the company may require you to stay in its employment for a specific period or impose other conditions.

5. Equity-based programmes

These allow employees to invest in the company and share in its growth. For example, stock options will enable you to buy shares at a set price. The dividend you receive depends on the company's performance, so working towards its success is in your interest.

6. Flexible working arrangements

Many companies are embracing alternative arrangements to attract and retain the best employees. They give you more control over your work schedules, promoting better work-life balance. Examples of these arrangements include remote working, flexible hours, and compressed work weeks.

7. Additional perks

Apart from the above benefits, many employers also offer perks to sweeten the deal for their employees.

These can include reimbursement for gym memberships, education expenses, and discounts on their products or services. Some companies provide free meals, transportation and clothing allowances, and on-site daycare services.

How to negotiate your remuneration package?

​Here are some tips to improve your chances of getting what you want when negotiating your compensation package:

1. Prepare to negotiate

Research market salary figures for your position and experience level to determine your worth. Consider cost of living adjustments for different locations. You can use our salary research tool to understand better what others in your field are earning. Enter your salary and choose a location to see the average salary for your position.

Factor in the high cost of living, especially in prime areas like Orchard Road or Marina Bay, and consider how your salary will support your lifestyle.

2. Initiate the negotiation

Ask if the salary​, remuneration​ and benefits the hiring manager presents during the offer stage are negotiable. If they're not, you may be able to renegotiate them in the future. If you feel the offer is below your expectations, provide your counteroffer. Don't be afraid to walk away if they refuse to budge.

3. Evaluate your take-home pay

In Singapore, it's essential to consider CPF contributions, taxes, and other deductions when assessing your net salary. Understanding your take-home pay after these deductions is crucial for financial planning in Singapore.

4. Review your benefits

During the hiring process, negotiate for benefits that are important to you, such as vacation time, additional paid days off, or stock options. Request an annual benefit or total compensation statement to understand the full value of your compensation package.

Renegotiate your benefits during your performance review if necessary. If your personal situation has changed or the company's benefits offerings have improved, a performance review may be due.

5. Request time for consideration

Ask for time to evaluate the offer before accepting. Be polite and thank your employer for the opportunity. Carefully review the compensation package details to decide if it meets your expectations.  

6. Get it in writing

Make sure the final offer letter includes all agreed-upon compensation elements. If there are any discrepancies, ask for clarification from the hiring manager. It's crucial to have everything in writing to avoid any misunderstandings or disputes in the future.

Bottom line

Remuneration packages consist of direct and indirect compensation elements. These include salaries or wages, bonuses, and commissions. Non-monetary benefits are also part of the package. Examples include health and life insurance, retirement plans, paid time off, and flexible working arrangements.

When evaluating a job offer, consider both your salary and benefits package. Your total compensation can have a huge impact on your quality of life and job satisfaction, while your salary provides financial stability.

However, the benefits you receive can help you maintain a healthy work-life balance, achieve security, and reach your professional and personal goals in Singapore’s competitive job market.

FAQs

Here are answers to some common questions about remuneration packages in Singapore:

What is the remuneration salary?

This is the total monetary compensation you receive. It includes your base salary, commissions, bonuses, overtime pay, and other cash incentives.

How do you calculate a remuneration package?

Add up your salary and all other cash components to work out the value of your total compensation. Then, assign a value to each non-monetary benefit you receive. For example, you can search for the market value of your company car and add that to your compensation package. This can give you a good idea of your total remuneration.

What should I consider when negotiating a remuneration package in Singapore?

When negotiating a remuneration package in Singapore, consider the cost of living, especially in areas like Orchard Road and Marina Bay. Research market salary benchmarks for your industry and position using local tools like Jobstreet.

Factor in CPF contributions, income taxes, and typical benefits offered by employers in Singapore, such as health insurance, annual leave, and flexible working arrangements.

What are the expected benefits included in Singaporean remuneration packages?

Common benefits in Singaporean remuneration packages include health and life insurance, annual leave (with a statutory minimum of 14 days), CPF contributions, and sometimes bonuses such as the ‘13th-month bonus.’

Other perks may include flexible working arrangements, professional development opportunities, and wellness programs. Some companies also offer transport or housing allowances, especially for those who live in higher-cost areas.

Is negotiating bonuses and other non-monetary benefits expected in Singapore?

Yes, it is common to negotiate bonuses and non-monetary benefits in Singapore. Many companies offer performance-based bonuses, but you can also negotiate for additional perks like flexible working hours, professional development programs, or increased annual leave.

Employers are often open to tailoring packages to attract and retain top talent in Singapore's competitive job market.

Can I renegotiate my remuneration package after accepting a job offer in Singapore?

In Singapore, it’s possible to renegotiate your remuneration package after accepting a job offer, especially during performance reviews or when your role expands.

However, it’s essential to approach this carefully and with apparent justification, such as taking on additional responsibilities or achieving significant accomplishments.

Employers in Singapore value transparency and performance, so make your case based on measurable outcomes.

What should I do if the company is unwilling to negotiate salary?

Check the benefits you stand to receive. Consider accepting the offer if they're adequate and can compensate for the salary. If not, ask whether you can negotiate for more or better benefits. Be bold and turn down the offer if this isn't possible.

What happens if the offer letter doesn't include the agreed-upon remuneration package?

When you sign your offer letter, you acknowledge that its content is accurate and reflects what you and the employer agreed upon. If there are any discrepancies, you need to bring them up with the hiring manager as soon as possible and ask for a revised offer letter with the correct details.

When is the best time to negotiate my remuneration package?

The best time to negotiate your remuneration package is during the offer stage of the hiring process. If you're already an employee of the company, you can renegotiate your compensation package in your annual performance review. Try to negotiate better terms if you are still waiting for the average salary increase for your industry.