Exclusive: A return to the war for talent in the east is on the cards, say Asian HR professionals
David Woods, April 22, 2010
Asian HR professionals are predicting a return to the 'war for talent' among employers, according to new research carried out by Thomsons Online Benefits.
The Asia Employee Rewards Watch 2010 report found the HR challenge most frequently identified by respondents is employee retention (61%). This was followed by maintaining/improving morale and employee engagement (54%) and controlling employee costs (40%).
The belief that Asia is quietly emerging with fewer economic backlashes than its western counterpart was also demonstrated by the fact two thirds of respondents (64%) are preparing for a period of growth, whereas only one in six (13%) believe their business is heading for a period of contraction.
As a result of the recession a staggering eight in 10 respondents (86%) believe reward professionals are under more pressure to minimise costs and improve return-on-investment in 2010.
But more than four in 10 respondents (45%) claimed their reward costs are escalating most significantly on salaries. With these two opposing forces, it is no surprise that reward professionals are unable to demonstrate the return-on-investment in relation to reward spend - over five in 10 reward (61%) professionals cannot defend or poorly defend their reward spend.
Half of the 201 Asian employers surveyed (50%) have a documented reward strategy in place. This represents a significant increase over 2008 suggesting that the economic downturn has placed more importance on having a robust governance approach to reward. But two in 10 companies still do not have a robust reward framework.
And despite the importance placed on the ability to report return-on-investment of reward spend, the majority of respondents could not do this very well (33.5%) or at all (27%).
Around a quarter of respondents (26%) claimed their biggest issue in relation to their benefits package administration is the burden on internal resources, while around two in 10 (24%) bemoaned the administration efficiency of the benefit providers.
Nearly two in 10 organisations (19%) did not know how much they spend on employee benefits. And nearly one third of respondents still use old-fashioned paper-based processes for benefits administration (37%).
The changes companies are most likely to introduce into their benefits package in 2010 are reviewing their health and wellbeing offering (49%), considering implementing flexible benefits (33%), and introducing total reward statements (21%).
Around four in 10 respondents either already have flexible benefits (19%) or are considering implementing them (22%) with a handful (3%) currently in the process of implementing them.
The majority of respondents (57%) that are planning to implement flexible benefits are looking to do so within six months to two years.
The majority of respondents (61%) source their benefits externally through an insurance broker, with around a third approaching the provider directly. Just under half of respondents (49%) actively measure and report on sickness absence levels.
Commenting on the findings, Marcus Underhill, global reward director at Thomsons Online Benefits, said: "The current and future economic climate looks promising for Asia, while uncertainty persists for western economies. Companies in Asia are now in acquisition and expansion mode, credit flows are returning to normal levels (in some places asset bubbles have formed), and (if not already happening) Asia will return to robust employment norms. Employees will need to be engaged all over again and the war for talent will become a familiar dilemma.
"Forward-thinking companies are looking for ways to improve employee engagement and how they communicate reward programmes. According to our research, nearly a quarter of respondents with traditional benefit plans are considering implementing flexible benefit programmes."