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Article | Beyond Data

Four elements guiding talent strategies and pay decisions in Asia Pacific

Compensation Strategy & Design|Talent|Total Rewards
Beyond Data

By Edward Hsu | September 3, 2021

Leveraging market data and analytics in four essential areas is helping to guide HR, pay and talent decisions in Asia Pacific.

Big talent decisions impact employee and business performance, and the immense responsibility of this rests on the shoulders of HR and business leaders. Intensive research, data analyses and consultations help to make sure that every decision and strategy is justified.

Many employers in Asia Pacific look to data to keep an eye on various factors, trends and insights to support their business with human capital decisions. As they consistently face workforce challenges such as talent attraction and retention, salary budget limitations, employee engagement, and countless others, leveraging data proves to be the most viable and effective method to assess the situation and find the most appropriate solutions.

Here are four essential elements that employers should keep an eye out for through market data.

  1. 01

    Job hotspots and hot functions

    It’s important for organisations to secure talent with the skills they need to realise their business strategy. Keeping tabs on current hot jobs in the market can help with reassessing and/or recalibrating strategies for pay and talent attraction and retention. This includes looking into the organisation’s current talent needs versus the business strategy versus the market trends. Take China for example. According to our latest data from the HR OmniSight platform, jobs within the Product Development function are the hottest in the High Tech and Semiconductor sectors, while IT Development jobs are the most sought after in the Electric Vehicle sector. These pieces of information can help organisations assess the competitive landscape and strategise in terms of how to best attract or retain critical talent given the situation in their respective talent market.1

    Hot jobs in China

    Product Development features high on the hot jobs list in China’s tech sectors
     High Tech Semiconductor Electric Vehicle
    1 Product Development Product Development IT Development
    2 Product Development Support Marketing Data Science and Business Intelligence
    3 Computer Game Development and Operations Engineering Product Development
    4 Project/Program Management  Supply Chain and Logistics Large Deal Acquisition Sales 
    5 Technical Sales Support  Product Development Support Sales Support and Administration

    Tracking where the demand for these jobs is coming from can provide employers another layer of information that can lead them to a more targeted approach in their talent attraction and retention plans. Knowing where the job hotspots are, organisations can foresee opportunities and challenges they may encounter in a particular location, and adjust accordingly.

  2. 02

    Pay trends in the market

    Compensation remains a fundamental driver of talent attraction, employee performance and consequentially, overall business growth. It is important for employers to ensure that salary budgets are leveraged with utmost efficiency and optimised to address business-critical workforce issues.

    Compensation professionals closely monitor pay trends in the market, such as compensation cost ratio and pay mix, to make sure that what they offer is not only competitive, but also consistent with their business priorities. In the Asia Pacific Fintech sector – where employers are engaged in a tight competition for digital talent – pay mixes vary widely in some critical markets. According to our 2020 Compensation Surveys, Fintech companies in Hong Kong and Singapore gear their pay mix towards base salary and short-term incentives to recognise digital employees' responsibilities and contribution. However, Fintech staff in China and India see a higher proportion of long-term incentives (LTI) than peers in other markets.2 This is a crucial detail for organisations with global or regional operations that deal with varying local practices across multiple locations.

    Chart shows Fintech pay mix in China, Hong Kong, India and Singapore across levels GG14 to GG18. - Description below

    Hong Kong and Singapore is geared strongly towards base salary with some STI, and a small portion of LTI at higher levels. China’s pay mix shows greater mix of STI and LTI than other markets. And India has a much stronger mix of LTI than STI.

    Figure 2. Pay mix in the Fintech sector varies greatly by market in Asia Pacific

    Other pay trends for compensation professionals to monitor closely are salary increase rates and city differential indexes. These are essential gauges to ensure that pay packages and decisions are, at the very least, compliant to market norms.

  3. 03

    Workforce effectiveness

    As business environments and the way work is done continue to evolve, HR and business leaders are in constant search for the right talent structure to adopt today and in the near future. Much of the effectiveness of HR allocation depends on the size and structure of the workforce and how is it going to be able to support business development.

    HR and business leaders are in constant search for the right talent structure to adopt today and in the near future.

    To take the pain and ambiguity out of this, employers can turn to data to understand the prevailing practices in the market and their competitors. Data such as attrition rates, talent structures, promotion increases and employee ratio by corporate function are all important indicators of workforce effectiveness. These are crucial preliminary data sets to inform talent decisions and to optimise the workforce size and structure to best support business strategy.

  4. 04

    Economic indicators

    The economic indicators of a market are important considerations when determining pay for employees. Compensation professionals track the trends on minimum and average wage growth rates to validate company pay levels for junior level employees and to make sure they adhere to local labour law standards.

    GDP is also well known to play a role in compensation, particularly in determining annual salary increases. In Asia Pacific, GDP trended towards recovery in the opening quarter of 2021 and dipped slightly in the second quarter. Despite that hiccup, there is overwhelming optimism in the region leading to a significant drop in the number of organisations freezing salary increases, from 30% last year to 13% this year. This is projected to fall even further to 2.5% in 2022, almost rebounding to pre-pandemic conditions.3

    30%
    of employers in Asia Pacific froze salaries in 2020
    13%
    of employers in Asia Pacific have frozen salaries in 2021

Keeping track of a mountain of data and analyses can be an overwhelming task, even more so when it involves pulling from different sources and independently verifying. An integrated and interactive software platform with all of the latest data in real-time, can save a significant amount of time and energy for HR teams. Quick and direct access to complete data and analytics allows employers to have a holistic view, which ultimately leads to better informed talent strategies and reward decisions.


Sources

1 Willis Towers Watson HR OmniSight

2 2020 Fintech Compensation Survey Report – China, Hong Kong, India, Singapore

3 Salary Budget Planning Survey Report (July edition) – Asia Pacific

Author

Leader, Rewards Data and Software – Asia Pacific

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