New Delhi: HR professionals can scarcelyafford to neglect a new finding that shows companies in Asia-Pacific are succeeding in retaining talent by giving preference to training and skill development over compensation packages.
Some of the most successful companies in the region are those that are looking for more sophisticated ways to link the ‘total rewards’ to support their business strategy, the Mercer Asia Pacific Total Rewards Survey says.
“Investments in training and development of employees help the companies create ‘employer brand’ that differentiates them in the war of top talent, making employees come and stay in such an organisation for longer periods,” Mercer Asia Pacific human capital business leader Rajan Srikanth said.
‘Total rewards’ is a talent management strategy sketched around three factors — compensation, including basic pay and incentive; benefits inclusive of retirement plans and work-life programmes; and careers which incorporates stretch assignments, training and development and other opportunities within the country.
Under this system, maximum weightage is given on training and development of employees as opposed to traditional systems where salaries and other monetary benefits were thought to be the most important factors to attract and retain employees.
“With the global war on talent showing no sign of relenting, organisations are striving to balance employee value proposition with more dollars on training and less on base pay to attract, retain and engage employees,” Srikanth said.
As employers in Asia-Pacific compete for scarce talent with high-demand skill sets, they are shifting some of the rewards investments focus to increase their competitive edge.
Over 64% of employers are investing primarily on training and career development followed by non-cash recognition awards at 43%, with annual cash incentive coming third at 34% and base salary at 275 as a strategy used for retaining employees.
More than 92% of the employers who have adopted this practice have been able to attract and retain the potential talent, especially in the areas of engineering, sales and marketing, as per the survey.
However, 76% of the respondents said aligning the total rewards strategy with the business strategy was a difficult task, while 75% found segmenting and differentiating high performers to implement the reward strategies was challenging.
The study examined the unique features of total rewards practice in over 750 organisations in the Asia-Pacific region across 12 markets and eight industries.