Flexible Wage System

The flexible wage system has 2 components: the Monthly Variable Component (MVC) and the Annual Variable Component (AVC).

The MVC is part of your basic monthly salary, and may be adjusted based on the financial situation as indicated by various KPI.
The AVC is directly linked to the company’s annual performance and varies directly with its operating and/or financial performance. It includes:
- Variable Bonuses, which reward employees for meeting productivity or performance targets and are usually offered at the end of the company’s financial year
- Other Variable Payments, rewarding employees for their contributions to short-term goals (e.g. new product launch, project completion, operational improvements) and are given monthly or quarterly
- Annual Wage Supplement (AWS) or 13th-Month Bonus, which is a single annual payment typically given at the end of the calendar or financial year

(A summary of the components of the FWS can be found here)

For Singapore:
1. Retains our competitiveness in a global economy
2. Keeps wage costs sustainable
3. Enables flexibility in wage structures and retains jobs in challenging times
For employers:
1. Enables agility and flexibility to adjust wages in financially challenging times which keeps business costs sustainable and competitive
2. Rewards employees according to business performance, thus motivating them to help in business improvement and wage restoration
For employees:
1. Ensures stable employment and job retention in times of economic uncertainty
2. Provides objectivity and transparency for employees as they will know why, when and how their wages will be adjusted

(An overview of the benefits of the FWS can be found here)

Raffles Hotel:

Deloitte:

Swiss Precision Industries:

For more information, refer to the FWS guidebook.

If you require assistance in implementing the FWS, you can approach the following partners: