Asia Pacific’s economic environment and compensation landscape remain dynamic and uncertain. The variable needs of a diverse workforce population adds an extra layer of complexity and interest.
The tight labour market is still one of the top challenges of employers in the region. The unemployment rate is expected to dip from 3.9% to 3.6% in 2023.
Almost all markets in the region suffered attrition last year, especially Hong Kong, India, Malaysia, Philippines, South Korea and Thailand. Correspondingly, 85% of employers are having a tough time attracting and retaining talent. With the pressures from the tightening labour market and rising inflation, employers continue to increase their salary budgets. According to our 2022 Salary Budget Planning Report – December edition, the average salary increase rate in 2022 was 5%, and is projected to increase to 5.2% in 2023.1
Aside from the external factors influencing attraction and retention, there are also people challenges to navigate. And although base salary is an ever-important tool, it is only one part of the solution.
WTW’s 2022 Global Benefit Attitudes Survey reports that over 50% of employees in Asia Pacific are actively looking for a new role or are open to new offers – revealing a delicate connection between employees and employers.
With the workforce becoming ever more diverse, it is not easy to meet everyone’s unique needs. The pandemic has also affected employees’ wellbeing in various ways – physically, emotionally, socially and financially. Lastly, with the increasing emphasis on environmental, social and governance (ESG) and sustainability issues, and diversity, equity and inclusion (DEI), setting up aligned and integrated benefits has become more complex.
Despite this complicated mix of challenges, understanding what’s going on is, ultimately, a future-proof way of addressing them.
Looking at workforce attraction and retention data across generations reveals interesting insights. The top two attraction factors across all generations are pay and bonus and job security. Beyond this, the generations set themselves apart.
Baby Boomers and Generation X are looking for a sense of purpose. Meanwhile, Millennials are seeking flexibility and career advancement, while Generation Z prioritises broader paid time off.2
An alarming revelation of generational workforce data is poor mental health for younger workers. An overwhelming percentage of Generation Z (42%) are suffering from anxiety or depression, the highest of all generations.2
When it comes to remote work, Generation Z are somewhat unhappy with their current arrangements. Being in the early stages of their professional lives, remote work arrangements may raise concern about relationship building and career development. Fifteen percent want more face-to-face time, while 23% want to work more remotely. Baby Boomers are more satisfied, only 5% want more in office time, and 19% are keen to work more remotely.2
For performance management, organisations say their employees find it most valuable to review progress against goals and feedback and to discuss barriers to success.3
When you fully understand your talent, you will be able to see a clearer path in crafting compensation, benefits and performance programs that are aligned to both the values of your organisation and the needs of your employees.
Knowing your employee population is critical. Millennials and Generation Z now make up almost half of the total workforce and will occupy 66% by 2030. To secure the right talent to drive organisation objectives – HR need to craft compensation, benefits and performance management programs that are aligned to employee’s unique values and generational needs. We can help. Get in touch with our experts below to find out how to power pay, benefits and performance in 2023.
1 2022 Salary Budget Planning Report – Asia Pacific (December edition)
2 WTW 2022 Global Benefit Attitudes Survey, Asia Pacific
3 WTW 2022 Performance Reset Survey, Asia Pacific
