BUSINESS AND HR professionals across Asia are looking for meaningful ways of managing rapid business growth amidst high attrition rates of talented workers, according to recent research from Hewitt Associates
BUSINESS AND HR professionals across Asia are looking for meaningful ways of managing rapid business growth amidst high attrition rates of talented workers, according to recent research from Hewitt Associates.
A survey of more than 1,500 locally owned firms across the Asia Pacific found the Philippines had the highest employee turnover rate (18.1 per cent), followed by Taiwan (17.7 per cent), China (14.4 per cent), India (13.1 per cent) and Singapore (13 per cent). In Australia, attrition rates dropped to 13.3 per cent – down from 15.1 per cent in 2004.
Commenting on the study, Nishchae Suri, head of Hewitt’s talent and organisational analytics consulting practice in Asia, said organisations will continue to strengthen their reward management practices and focus on pay for performance to retain talent and enhance overall productivity.
Furthermore, Asia’s markets have demonstrated further growth over the past year, which has impacted salaries throughout the region. Many employers are reporting pay increases in 2005 and this trend looks likely to continue in 2006.
This year, India once again reported the highest average salary increase at 13.9 per cent, and employees in the Indian IT-enabled industry received the highest increase across all five groups surveyed, at 17.9 per cent. The Philippines recorded an impressive average overall salary increase of 8.2 per cent, which was closely followed by China, at 8.1 per cent.
In Australia, the average overall salary increase budget ranged from 4.3 per cent to 4.6 per cent for the five employee groups surveyed for 2005, and from 4.4 per cent to 4.5 per cent for 2006.
“Australia’s economy has continued to grow over the last year, so it comes as no surprise that companies awarded employees with a healthy salary increase in 2005,” said Siddharth Mehta, head of Hewitt’s talent and organisation consulting analytics practice in Australia.
Fewer companies reported salary freezes for 2005 than 2004, and on the whole this improvement looks set to continue into 2006. In Korea, 5 per cent of companies expect a salary freeze, compared to 4 per cent in China and 3 per cent in the Philippines. In Australia, 2 per cent of firms reported a salary freeze for 2005 and none expect a salary freeze for 2006.
Linking objectives to performance continues to be popular in Asia, and the ratio between variable and fixed pay will likely continue to increase in most countries except Singapore next year. Stock options remain the favoured long-term incentive.
Fixed bonuses were also popular this year. Leading the way, 81 per cent of companies in Taiwan offered fixed bonuses to employees in 2005, closely followed by 72 per cent in Singapore and 67 per cent in Thailand.
In Australia, senior/top management continued to have the highest percentage of variable pay in their total cash compensation. Forty-eight per cent of companies position their salary by comparing base salary with the market, while only 14 per cent benchmark total cost to the company with the market.
It is expected that the ratio of variable to fixed pay will increase in 2006 for all groups surveyed except manual employees. Furthermore, 27 per cent of companies offered fixed bonuses to their employees in 2005.
