Singaporean Questions Pay Disparity Between New Hires and Loyal Employees

Singapore, Singapore Jul 13, 2026 ALN: Is the reward for loyalty… watching the new guy earn more than you?

That was the question one Singaporean recently posed after noticing what they saw as a growing trend, particularly in the banking sector, where companies seem willing to pay significantly more to attract new hires than to reward the employees who have stayed. This disparity in pay between new hires and long-standing employees has sparked discussions about the value of loyalty in today’s job market, especially in sectors that are known for their competitive compensation packages.

In a post on the r/askSingapore forum, the user claimed that annual salary increments at these companies are often limited to low single digits, around 2% to 4%, while promotion-related pay rises typically range from 8% to 12%. By comparison, external hires can reportedly secure salary increases of more than 20% simply by joining the same organisation. Such figures highlight a significant gap in pay increases that raises questions about employee retention strategies and the long-term implications for workplace culture.

Struggling to understand the logic, the user wrote, “From a business perspective, wouldn’t it be cheaper to retain existing employees who already know the systems, products, stakeholders, and culture instead of paying a premium to hire externally?” This question reflects a growing concern among employees who feel undervalued, leading to discussions about the sustainability of such practices in the long run.

This happens globally

In the comments, many users stated that workplace loyalty simply is not rewarded the way it once was. They argued that if your goal is to grow your income, you’re generally better off changing jobs every few years than staying with the same employer and waiting for annual increments or promotions. This sentiment is echoed in various industries worldwide, where job-hopping has become a common strategy for salary advancement.

Several commenters also pointed out that, from a company’s perspective, there is often little reason to give existing employees a substantial pay rise if they are already performing well and have no plans to leave. A modest annual increment of around 3 percent, they said, is often enough to keep employees around, while the promise of a larger pay rise through a future promotion gives them something to work towards. This reliance on minimal raises can lead to a lack of motivation among employees, who may feel that their hard work is not adequately rewarded.

“If you want to chase pay, then job hopping is the way to go every few years,” one user wrote. “No such thing as company loyalty these days, especially with the ongoing layoffs and retrenchments everywhere. I’ve job-hopped a few times and more than doubled my salary comfortably instead of waiting for that next big increment from a promotion in a few years time.” This perspective underscores a shift in employee mentality, where loyalty to an employer is increasingly viewed as less beneficial than pursuing better opportunities elsewhere.

Another commenter said this isn’t just happening in Singapore or the banking sector. “This happens globally. Nothing specific to SG. Internal HR policies and budgets dictate how much increments can be handed out.” This observation points to a broader trend in corporate compensation strategies, which often prioritize external talent acquisition over the development and retention of existing employees. As companies face pressure to remain competitive, they may allocate resources in ways that disadvantage long-term employees.

“If you demand 20% and they agree, then everyone will demand the same. If you demand and they refuse, and end up hiring someone from the market with 20% increase in salary, it’s still better for the company. Because existing staff can’t ask for 20% YoY.” This statement reflects the delicate balance that companies must strike between retaining talent and managing payroll expenses. The pressure to maintain a competitive edge can lead to a culture where external hires are prioritized, potentially alienating dedicated employees.

A third commenter added, “The external hires get higher salary bumps to entice them to leave their current company and bring their so-called expertise to the new one.” This practice raises questions about the value placed on experience and loyalty versus the perceived need for fresh perspectives that new hires can bring. It also highlights a potential disconnect between what companies say they value and how they compensate their employees.

A fourth shared, “Once I had a conversation with a recruiter. Because it doesn’t make sense to train someone all over again. She told me straight up this is how the company operates. In order to get more than 5% increment, they have to submit a report on why it’s justified. Unfortunately, if your company also operates like this, you know what to do.” This insight into internal processes suggests that many companies have rigid frameworks in place that limit the ability of employees to negotiate their salaries effectively, further entrenching the disparity between new hires and existing staff.

In other news, a foreign domestic helper has claimed that her employer threatened to send her back to her home country and leave negative feedback with the Ministry of Manpower (MOM) after she asked whether she was simply not the right fit for the household. This incident highlights the challenges faced by domestic workers in Singapore, who often navigate precarious employment situations with limited rights and protections.

Writing in the SINGAPORE TRANSFER (No Fees/SD), DIRECT HIRE & NEW HELPER Facebook group, the helper explained that she raised the question because she had been struggling to meet what she described as her employer’s exceptionally high standards. This situation underscores the need for better communication and understanding between employers and employees, particularly in sectors where power dynamics can significantly impact job security and overall well-being.

As discussions around pay disparity and employee loyalty continue, it is clear that both employees and employers must navigate a complex landscape. The evolving nature of work, combined with economic pressures and changing workforce expectations, necessitates a reevaluation of how companies approach compensation and retention strategies. If businesses wish to cultivate a loyal and motivated workforce, they may need to reconsider their practices and find ways to better reward the contributions of long-standing employees while also attracting new talent.