ASEAN companies face a growing shortage of skilled workers and the challenging reality of transitioning employees back to on-site work. According to Mercer’s latest COVID-19 pulse survey, companies in Indonesia, Malaysia, Thailand, and the Philippines face an uphill task in attracting and retaining talent. This is leading to a higher-than-usual attrition level that many call the Great Resignation.
The primary reasons: dissatisfaction with pay and benefits and limited career advancement have emerged as the primary drivers of higher-than-usual attrition levels.
The biggest challenge is in hiring mid-career professionals
The survey showed that most respondents in Southeast Asia saw a higher turnover rate. It is most acute at the mid-career level when compared to past years.
Fifty-five percent of the employers listed employee dissatisfaction with pay as the leading cause for attrition, followed by the employee’s ability to get better benefits at another company (46%) and limited career advancement (43%).
With more mid-career professionals leaving their jobs, employers are also finding it more difficult to recruit them. The main reason is the inability to find the right skills at the right price.
About half of the survey’s respondents experienced moderate to significant difficulty attracting mid-career hires, compared to recruiting senior executives (40%) and entry-level positions (10%).
Employees want more than better pay
So what is influencing a company’s ability to retain workers? Employers have been using financial incentives such as increasing promotion opportunities (48%), paying higher than market rate wages (31%), and implementing employee referral bonuses (24%).
However, the disruption caused by COVID-19 has put the spotlight on factors beyond financial incentives. And being labeled as a “great place to work” is not enough.
The majority of the survey’s respondents felt that while having a reputation of being a “great place to work” (68%) helps to attract talent, it is eventually the organization’s culture (76%) that helps to retain talent. This is why employers have taken action in areas such as enhancing workplace flexibility and providing more well-being and mental health support.
“The pandemic has accelerated the need for employers to reassess their ability to retain talent in the face of a tight labor market and skills shortages. Rather than just focus on what’s driving attrition, employers should consider what will make their employees stay,” said Godelieve van Dooren, Mercer’s chief executive officer for the South East Asia Growth Markets.
“While there is a tendency to compete for talent using financial incentives and rewards, it’s not sustainable in the longer term and is easily replicated by competitors. More intangible drivers like culture, workplace flexibility, and career progression will be key competitive differentiators for companies to hold on to their most prized assets – their people,” he added.
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