April 29 2010 - A recent survey of Asian reward professionals by Thomsons Online Benefits shows expectation of a return to the 'war for talent' amongst employers in the region.
The Asia Employee Rewards Watch 2010 found that the greatest HR challenges reported by survey respondents in Asia are:
employee retention (61.19 percent)
- maintaining/improving morale and employee engagement (54.23 percent)
- controlling employee costs (39.80 percent)
This survey of 201 organizations - the third Asia Employee Rewards Watch - indicates a positive attitude towards the future in Asia with far fewer consequences from the economic crisis than those experienced by western counterparts. In fact, 63.68 percent of respondents said that they are preparing for a period of growth, with a mere 13.43 percent believing that their business is heading for a period of contraction.
Other major findings include:
- The recession has put 85.88 percent of respondents under increased pressure to minimize costs and improve return-on-investment in 2010. But 44.72 percent said their reward costs are escalating most significantly on salaries. Not surprisingly, 60.59 percent of reward professionals were having difficulties in defending the amounts they were spending on employee rewards.
- Over a half of respondents (50.25 percent) - far more than in 2008 - stated they have a documented reward strategy in place. This suggests that the economic crisis has led to a more robust governance approach to reward management. However, two in ten businesses still do not have a robust reward framework.
- 33.53 percent of respondents said they could not report return-on-investment of reward spend very well with 27.06 percent saying they could not do so at all.
- 26.47 percent said that their biggest issue in relation to their benefits package administration is the burden on internal resources. And 23.53 percent complained about their benefit providers' administrative efficiency.
- 18.82 percent of respondents did not know how much they spent on employee benefits. Amongst those who did know, the most common estimate (21.18 percent) was 15-25 percent of salary.
- 37.43 percent of respondents continue to use traditional paper based processes for benefits administration.
- Changes most likely to be introduced into this year's benefits package are:
- reviewing health & wellbeing offerings (49.12 percent)
- considering implementing flexible benefits (32.75 percent)
- introducing total reward statements (21.05 percent)
- 19.41 percent already have flexible benefits and 21.76 percent are considering their implementation. Just 2.7 percent are currently in the process of implementing them.
- 57.46 percent of those planning to implement flexible benefits intend to do so within six months to two years. Costs were the major factor in the implementation decision.
Health & Wellbeing
- 61.39 percent of respondents source their benefits externally through an insurance broker. 34.81 percent approach the provider directly.
- 48.73 percent actively measure and report on sickness absence levels.
Marcus Underhill, Global Reward Director for 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) 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 programs. According to our research, nearly a quarter of respondents with traditional benefit plans (21.76 percent) are considering implementing flexible benefit programs."