Students who graduated from the Institute of Technical Education (ITE) last year started their working life with an average monthly salary of $1,646 - the highest in four years.
Their pay was 18 per cent higher than the $1,391 a month earned by those who graduated in 2009, according to an ITE survey.
It also found that students who graduated from engineering courses last year took home the highest overall monthly salary of $1,725 - 9.5 per cent more than the starting pay of the engineering cohort in the previous two years.
Mr Kurt Wee, president of the Association of Small and Medium Enterprises (Asme), is not surprised.
He told The Straits Times that "increasingly, small and medium-sized enterprises (SME) are lacking people with the engineering or technical know-how".
"A lot of those who graduated with engineering knowledge are moving to other sectors."
The rising wages "seem to be a result of both SMEs being more willing to pay more, and the tightening of labour policies", added Mr Wee, referring to the reduction in foreign worker quotas.
"Many ITE engineering graduates do not stop at the Nitec or Higher Nitec qualification. They would go on to pursue a diploma or degree if they have the means and ability," noted Mr Goh, adding that this "inevitably reduces the talent pool".
Mr Neo Kah Kiat, 43, founder of Neo Garden Catering, said workers tend to job-hop when they are not paid competitively. He pays fresh ITE graduates between $1,600 and $1,800.
"But pay is just one aspect. To keep your turnover rate low, you must have the right company culture where the work environment is good, where staff are well taken care of," added Mr Neo.
ITE graduate Chow Zhi Hua, a retail assistant at home improvement store Home-Fix, agreed.
"Of course I must enjoy what I am doing and I must like the work environment, but the monthly pay must not be too low either, or else it will be quite hard to survive," said 23-year-old Mr Chow, who earns about $1,600.
The overall employment rate for ITE graduates has remained consistent in the past four years.
The survey also found that 87 per cent of those who graduated last year and did not further their studies landed jobs within six months - mostly as associate professionals and technicians, and service and sales workers.
While the numbers seem robust, a government review committee is looking at ways to improve polytechnic and ITE graduates' job prospects and academic progression.
Senior Minister of State for Education Indranee Rajah is chairing the committee, which is expected to complete its findings next year.
ITE said about one in five of its graduates move on to local polytechnics. The institute hopes to push that to one in four by 2015.
Graduate Davis Li, who progressed from ITE to Nanyang Polytechnic and then to the National University of Singapore (NUS), chose to further his studies as he had won a scholarship to pursue a diploma course when he graduated from ITE 10 years ago.
He was later offered another scholarship to pursue a university degree.
"When I was posted to ITE, I took it as a second chance I had in my studies. So I went all out and decided to aim for a degree," said Mr Li, 30, now a project manager at the Infocomm Development Authority (IDA).