A recent salary trends survey by ECA International revealed that employees in Hong Kong can expect salary increases of three percent in 2010, going up from the one percent averaged increment in 2009, echoed many other forecasts and findings stating that the economy is on its way to recovery, also indicated a renewed optimism in the economic outlook. Growing Optimism Towards 2010 Results are taken from ECAs Salary Trends Survey 2009/2010 which reports current-year salary increases for local national employees and the anticipated increases for reviews in the forthcoming year, based on information collected from 297 multinational companies in over 50 countries.
However, the three percent increment in Hong Kong, like Singapores and Taiwans, are lower than the regional average, according to Lee Quane, ECA Internationals Regional Director for Asia. This reflects the fact that these are developed economies with low inflation rates. Rises here are in line with similar developed economies elsewhere in the world such as North America and Europe.Salary increases in developing Asia like Vietnam (10 percent), India (9.3 percent) and Indonesia (8.5 percent) will continue to be much higher than in locations like Hong Kong in order to ensure that salaries keep apace with inflation. This is also a reflection of the demands of rapidly growing markets and the fierce war for talent in such locations.
Employers Making Up for Salary Freezes While these averages are lower than the highs of 2008, these forecasts are an indicator that companies operating within the region are much more confident about economic conditions than a year ago. Quane explained, Asia has weathered the economic crisis better than many regions, defying predictions, and these increases suggest that many employers are actively making up for the fact that employees in 2009 typically experienced little or no uplift in their salary.
The findings from ECA International at one point suggested a brighter outlook for Hong Kong businesses, but some organisations already suffered from talent disengagement and low morale in the past year. This sounded an alarm for HR professionals and many are looking for more effective ways to avoid similar risks from happening again.
This may be the reason why so many businesses concentrated on mechanisms and concepts to improve employee engagement now. Impacts caused by market fluctuations may be something unforeseeable and unavoidable, but that may exactly be the point when HR professionals should take things into their hands. Employee engagement is closely related to salary levels, but rewards in monetary terms is only one of the factors. It should be looked at as a process to create a committed and motivated workforce.
Engagement Programmes Steer Companies Towards Growth Not only does better morale boosts productivity but a company further benefits from an engaged workforce because they understand the company more, become stakeholders and can actively steer the company towards growth, for example by making suggestions regarding how the company should perform.
While the salary increment in 2009 is low, HR professionals have to explore ways to enhance employee engagement and investigate whether alternative ways of rewarding the employer are possible. Quane further explained, Benefits packages shouldnt be undervalued as an incentive. Its a good idea to keep an eye on salary and benefits trends since it is important to be able to benchmark the company against others, and to create an edge where your company stands against others. Quane stressed that communication is a vital ingredient in employee engagement as well. Everyone wants to feel they are listened to and that they are valued enough to be told what is going on. Generally speaking, the key is to create a work environment where people want to be.
International Workforce Is a Big Challenge One of the results of our global economy is the mobility of workers working across cities or countries. In term of international assignments, getting the right people, meaning those with not only the skills but also the ability to adapt to new cultures and work with an ever increasing diverse international workforce, is definitely a big challenge.
When talking about relationship between employee benefit and employee engagement, Quane used examples of expatriates and admitted that employee benefit is an important factor affecting employee engagement levels and staff morale. One example in the realm of international assignments is the benefits designed for partner support and childrens schooling. Many assignments failure are often caused by childrens education and partner support so an emphasis towards benefits designed to solve such problems will more likely improve employee engagement.
Its also worth pointing out that in the case of international assignments, insufficient compensation is generally given as one of the least important reasons for assignment problems, even for those employers who reported pay issues (including loss of partners earnings) as one of the biggest challenges when recruiting staff, as shown in the Managing Mobility 2008 survey findings. When assignees make complaints on pay, many HR professionals have found on closer investigation that these often hide other underlying issues.
Effective Approach: Cautious but Active ECAs latest Expatriate Salary Management Survey also revealed that a growing challenge for HR is to instil sufficient flexibility in assignment pay systems to be able to respond to the changing business requirements. Lee regards this as an issue of significance considering the ever-increasing diversity of assignment locations and expatriating countries and nationalities.
In all, Quane concluded that a transparent and clear policy that is communicated well is extremely important for all kinds of organisations to uphold overall staff commitment. However, an equitable pay system is even more crucial when managing international assignments because of the number of different nationalities and therefore, a divergence of salary starting points involved.
Quane also noticed that through these challenging times although organisations are making more changes than usual, these are essentially adjustments rather than sweeping changes. A wait-and-see approach while being pro-active where necessary seems to be what companies find to be an effective approach.
