An industry expert has warned “loyalty in Singapore does not exist". How much further can HR go to engage and retain employees?
That quote, from an experienced HR consultant who spoke to HRD Singapore about employee engagement, no doubt sums up the reality facing many HRDs in Singapore. In an era where the unemployment rate has hovered around 2% for the last four years and staff tenure rates are notoriously short, retention has emerged as a burning business issue for 2015.
As just one example, one in three (34%) finance & accounting employees will last two years or less in a new job, compared to the global average of 15%.
|Length of employment for finance & accounting professionals||All countries||Singapore|
|< 1 year||1%||1%|
|6 years to 9 years||14%||1%|
|> 10 years||19%||5%|
|Average||5 years 2 months||3 years 5 months|
Yet the ‘loyalty is dead’ argument doesn’t hold true for Carolyn Moore, regional HR director at advertising & marketing firm JWT Asia Pacific. She says there is a fascinating divide occurring within the retention strategies being deployed by Singaporean employers. On one hand, there’s an ‘engagement approach’ to retention; on the other hand, there’s a ‘remuneration approach’. Both approaches have their advocates – and their critics.
“We take the view that if someone wants an extra $100 in their pay packet, they weren’t engaged in the first place. Yet I think that ‘more money’ strategy is something of a cop-out, even in this environment,” Moore told HRD Singapore.
Specifically, Moore said that a direct approach to engaging and developing talent is critical to retaining talent, and this is even more critical in industries that have faced rapid-fire change.
“Technology is driving a rapid evolution of jobs to the point where jobs are being conceived before a labour market exists to support those roles. For example, social media marketing didn’t exist when I went to university,” Moore said.
“At JWT we’re trying to provide the best intensive learning on the job, not just to optimise the technology we have now, but to be forward-thinking enough to develop skills that will be relevant in two, five, 10 years’ time for the marketing and advertising industry.”
Moore added that the combination of meaningful L&D, a committed and transparent management team and talented peers can mean that “an extra $50 or $100 in a pay packet isn’t going to have much of an impact”.
However, an extra 50% in a pay packet is more challenging – and this is the approach being taken by some players in Moore’s industry.
“There are some companies in the advertising industry around the APAC region who find it so difficult to compete on the engagement front that they are inflating salaries just to draw people away. I’m talking 80-100% pay increases.”
Moore said that these two retention paradigms are essentially “like comparing apples with oranges – they are fundamentally different approaches”.
While Moore questions the sustainability of throwing more money at workers to lure them across from competitors – or to retain them – she does concede that remuneration must be competitive. “You cannot be underpaying – you have to be in the ball park,” she said.
JWT has implemented a revised salary strategy not so much to address this particular issue, but to ensure that globally the company can offer a standard baseline remuneration package. This approach is also helping the company lock in their high potential and high performing employees.
“If employees know that their pay is at industry standard, the question of ‘will I move for the extra money?’ becomes even more negligible,” she said.
“It’s a highly competitive industry, but I don’t think it’s too different to other industries. You must evolve your HR capabilities or your company won’t survive. That in itself is a very interesting point for the Asian market.”
Moore noted that the relatively new phenomenon of HR having a seat at the table requires a different “HR-centric” approach to running a business.
“You’ve got your P&L, you’ve hit your numbers for last year – but what about the 40% employee turnover rate?
“Many early movers into Asia were able to grow astronomically with minimal concern for people and community issues. Now it’s starting to tighten up and it’s requiring a fundamental shift in thinking for both HR practitioners and business leaders.”