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It’s the salary, stupid – or is it really?

by | Apr 28, 2008 | Businesses Real World Contingencies | 0 comments

Business Times – 26 Apr 2008
 

Two studies by HR consultancy firms give their take on why employees quit

By CHUANG PECK MING AND NISHA RAMCHANDANI

(SINGAPORE) Is pay the best way to retain talent and raise staff performance? Or are non-monetary factors such as career prospects and engagement more important?

The debate on these questions has grown hotter as the global battle for talent intensifies. And it continued yesterday, with two studies offering seemingly opposite conclusions.

A study by human resources firm Hewitt Associates shows the top reason employees in Asia quit is ‘external inequity in pay’. And 70 per cent of the ‘best employers’ – more than for any other factor – see a big link between improved performance and higher pay.

But according to another study by Robert Walters, 38 per cent of employees the recruitment consultancy polled in Singapore said they would feel compelled to walk out the door if they faced limited career prospects. One in four said they were likely to leave if they did not feel appreciated by their boss.

When it comes to pay and perks, just one in five of the employees would throw in the towel, according to the Robert Walters survey, which covered 6,300 workers globally, including 1,415 Singaporeans.

Indeed, Singaporeans would seem happier with their pay than workers elsewhere. The Hewitt study shows 42 per cent of employees here are dissatisfied with their compensation, against 54 per cent for Asia as a whole.

More employees are unhappy with their pay in Australia (52 per cent), China (71), Hong Kong (51), India (44) and Japan (73).

Still, money figures strongly in the minds of Singaporean workers – perhaps more than many others in the region.

Robert Walters’ survey shows Singapore workers to be the most bonus-driven in Asia – 3 per cent of them would resign if they were disappointed with their bonus, compared with less than one per cent of Australians and New Zealanders, just over one per cent of Malaysians and 2.5 per cent of Hong Kongers.

Hewitt principal Nishchae Suri said that to keep employees happy and make them stay, pay must not only be fair but must be seen to be fair in terms of the job and compared to the pay of other employees. Employers in Asia are generally doing a bad job at this, according to him.

While Asian employers have ‘increased investment’ in compensation, they are ‘not yet’ getting the ‘strategic and financial results’, he said.

Poor communications on the part of employers is the chief culprit, especially with the new breed of talent that seeks to switch jobs every other year wants complete transparency, is increasingly competitive and eager for fast promotion.

Still, the debate is far from settled. Robert Walters reckons employers should put their money into career progression.

‘Investing in career progression is one of the most important things that any employer can do to retain staff,’ said Mark Ellwood, managing director of Robert Walters Singapore. ‘While pay is important, far more vital to staff is knowing how their job will develop. Paying out the biggest bonuses and highest salary won’t guarantee that staff will stay put.’

About Kelvin

26 years and still counting, as a Personal Wealth Manager and part of the inaugural batch of Prestige Elite Advisors from AIA Affluent & High Net Worth Division, the certifications and accreditations have equipped me with the ability to partner Law Firms, Tax, Trust and Immigration Advisory Companies to offer their services to my clients.