Cautiously
Inching Forward towards 2010
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 ECA's Salary Trends Survey 2009/2010
which reports currentyear 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 Singapore's
and Taiwan's, are lower than the regional average, according
to Lee Quane, ECA Internationa's 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 shouldn't be undervalued
as an incentive. It's 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."
The findings 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.
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 children's schooling. Many
assignments' failure are often caused by children's education
and partner support so an emphasis towards benefits designed
to solve such problems will more likely improve employee engagement."
It's 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 partner's 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
ECA's 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.
|
