Impact of salary hikes, challenges faced by SMEs

This  article covers the impact of salary hikes, challenges faced by SMEs in maintaining competitive pay scales, and rising operational costs in Singapore's accountancy market. It also highlights the adaptability of local firms amid rising demand for accountancy services. 

Singapore accountancy firms operate in one of the most expensive markets in the world and, like many of their peers, are finding themselves having to adapt quickly to a rapidly changing business environment. While competition from bigger firms is adding some stress, the feedback to our latest country report is that local firms are holding their own and thriving.

The key area where larger firms are having an impact on the local market is salaries. The recent salary hikes by Big Four firms in Singapore, raising starting salaries by about 20%, have spurred SMEs to increase entry-level wages to remain competitive.

SMEs face significant challenges in maintaining competitive salary structures while balancing profit margins. “Despite efforts to increase starting salaries, SMEs often operate at lower pay scales compared to Big Four firms, which affects their ability to attract top talent,” said Eng Kian Lee, managing partner of PKF-CAP LLP. “The need to adjust fees upwards to accommodate rising salary costs is tempered by client resistance and competitive pressures, potentially impacting long-term sustainability and audit quality.”

Eng Kian Lee, Managing Partner, PKF-CAP LLP





For complete article, visit Country Report: Singapore - IAB | Issue 659 | July 2024 (h5mag.com)