A discussion on Singapore's Reddit community has reignited debate over salary growth, with employees questioning why companies appear willing to pay significantly more to attract external hires than to reward long-serving staff, according to The Independent Singapore News.
The conversation began after a user on the Singapore forum highlighted what they described as a growing trend, particularly in the banking sector. According to the post, annual salary increments for existing employees are typically limited to 2% to 4%, while promotion-related pay rises generally range between 8% and 12%.
By contrast, external candidates are reportedly able to negotiate salary increases of more than 20% simply by joining the same organisation.
Retention questioned
Questioning the business rationale behind the practice, the Reddit 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?"
The user also invited hiring managers, HR professionals and employees in Singapore's banking industry to explain why organisations continue to adopt this approach.
Job hopping favoured
Many respondents argued that the trend reflects a broader shift in the employment market, where changing jobs has become one of the fastest ways to secure meaningful salary growth.
Several commenters said companies often have fixed internal salary increment budgets, making it difficult to offer substantial pay increases to existing employees, even when market salaries rise.
One Reddit user commented, "If you want to chase pay, then job hopping is the way to go every few years."
The same commenter added, "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."
Global phenomenon
Others noted that the issue extends well beyond Singapore and is driven largely by corporate compensation policies.
One commenter said, "This happens globally. Nothing specific to SG. Internal HR policies and budgets dictate how much increments can be handed out."
The user further explained, "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 a 20% increase in salary, it's still better for the company. Because existing staff can’t ask for 20% YoY."
Another commenter suggested that higher salaries for external hires are often used as an incentive to attract experienced talent.
"The external hires get a higher salary bump to entice them to leave their current company and bring their so-called expertise to the new one."
A separate user shared a conversation with a recruiter that highlighted how internal salary policies can limit pay increases for existing staff.
"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."
Loyalty versus pay
The discussion reflects a growing sentiment among professionals that internal salary progression often lags behind market rates, encouraging employees to seek better opportunities elsewhere.
While companies may view external recruitment as necessary to secure specialist talent, many workers argue that retaining experienced employees through more competitive salary growth could ultimately prove more cost-effective than replacing them.