Despite the challenges of rapidly rising inflation, Asia Pacific markets are outperforming peers to maintain a strong outlook in the global economy.
In 2022, organisations planned higher salary budgets to maintain competitiveness in a tight labour market. However, there is a growing concern with turnover as attrition rates in 2021 and 2022 became higher than in 2019 for most Asia Pacific markets. According to our 2022 Salary Budget Planning Survey Report (July edition), 89% of organisations had difficulty attracting talent, while 86% experienced challenges in retention.1
Many Asia Pacific employers are focusing their retention efforts on key talent. Almost half of organisations have conducted compensation reviews for specific employee populations. Nearly two-thirds have either provided a retention bonus, lump sum payment or allowance, or are considering doing so. And over 80% have applied or are considering targeted increases for key talent.1
Looking ahead to 2023, around half of Asia Pacific organisations expect to still face attraction and retention challenges. Aside from targeted pay-related actions, many organisations are taking steps to incorporate workplace flexibility and diversity, equity and inclusion (DEI) into their rewards.
Employee preferences have changed since organisations embraced the hybrid work set-up. Many employees are seeking opportunities that will allow them to work remotely. Our research on a high-performing employee experience found that flexibility at work enables organisations to be more agile and excel at innovation. When implemented successfully, flexible work increases employee productivity while allowing them to experience fulfillment from work.
According to WTW’s 2022 Global Benefit Attitudes Survey, remote working in the Asia Pacific region has helped 67% of employees achieve a better work-life balance.2
Workplace flexibility has also become a major factor in attracting and retaining talent. Two-thirds of organisations increased workplace flexibility as part of their attraction strategies. To improve talent retention, 48% of organisations have allowed employees in certain roles to work from anywhere and 25% more organisations may follow suit soon.1
Today’s talent are seeking employers who are serious about DEI efforts and follow through on promises. In response to this, almost two-thirds of Asia Pacific organisations are putting a broader emphasis on DEI and a quarter are planning to do the same as part of their attraction and retention strategies.1
There are organisations in Asia Pacific that have committed to reflecting workforce diversity and inclusion by expanding their sourcing capabilities. They are also working with and supporting partner organisations to build new career pathways for underrepresented communities. Some organisations are also institutionalising their DEI efforts by including measurable objectives to their activities, such as increasing female representation and addressing the gender pay gap.
While compensation remains the major driver in talent attraction and retention, global events of recent years have highlighted for employees the value of intangible rewards, such as work flexibility and an environment that embraces DEI. By taking a proactive approach to leverage and integrate both traditional and less traditional offerings, employers can strive for more holistic total rewards and an employee experience that can translate to higher engagement and productivity and overall business performance in the long-term.