Mercer on Wednesday released the results of its 2019 Thailand Total Remuneration Survey, an annual study identifying key remuneration trends and making hiring and pay increase predictions for the following year.
The survey is Mercer’s flagship annual compensation and benefits bench-marking study, with participation increasing to 607 companies this year across various industries.
In addition, it also conducts regular pulse surveys throughout the year to keep up with impact of the rapidly changing business environment as well as the latest trends in compensation and workforce.
The 2020 salary increase forecast across key industries in Thailand remains stable at five per cent, consistent with the low rate of inflation projected at 1.1 per cent, compared to one per cent this year, according to an executive briefing form IMA Asia/Asia Pacific last month.
The automotive sector is forecast to enjoy the highest salary increase of 5.5 per cent, while salary in the chemical industry is likely to see a slight rise of 5.2 per cent.
The forecast of variable bonus trend across all industries that plan to pay workers for their 2019 performance is 2.3 times the monthly base salary.
The automotive industry is predicted to pay the highest variable bonus at 3.6 times the monthly base salary when compared with other industries, followed by the life insurance and high tech industries, which plan to pay a variable bonus of 2.5 times the monthly base salary.
Across industries, the voluntary turnover rates were on the rise last year with the turnover rate increasing to 12.8 per cent last year compared to 12.5 per cent in 2017.
However, according to the latest data from Mercer’s Asia Market Pulse Survey, the voluntary attrition rate seemed to have stabilised in the first quarter of this year and remained the same as the first quarter of last year at four per cent.
While the main reasons cited for employees leaving their organisation in Asia varies by age group and gender, in general the top three reasons for employees leaving their organisation are competitive pay, manager interaction, and clear career path and job security, according to the Mercer Asia Pulse Survey (first half of this year) and the 2019 Global Talent Trends Study.
The high-tech industry in Thailand has the highest involuntary turnover rate at seven per cent, which can be attributed to the increasing role of technology and the need for organisations to adapt to automation and digitalisation.
The hiring trend in Thailand next year is expected to drop slightly with 29 per cent of organisations planning to add new hires compared to 31 per cent next year. Given the stabilising voluntary turnover rate, the focus of most organisations is on upskilling and retaining key talent.
Mercer Thailand career product leader Piratat Srisajalerdvaja said: “The jobs we are familiar with today are disappearing and the emphasis on access to new skills needed for the future workforce will impact the way we define and benchmark jobs in the future.
“To cope with the demand for digital skill sets, companies are paying a premium for discrete skills or relying on broadly defined jobs to give them the scope to bring in or build these skills.
“We anticipate that work will morph into ‘skill clusters’ which will become the foundation of base salaries in the future. Rather than being merely technical or functional skills, a skill cluster is more holistic and includes both cognitive and behavioural skills,” Piratat said.
Mercer Thailand CEO Juckchai Boonyawat said: “Digital transformation forms a key part of Thailand’s national agenda with the Thailand 4.0 Master Plan and Digital Economy Plans [2018-2021] and in order to attract, retain and grow, companies need to adapt to the new digital reality and an evolving workforce.
“Faced with changes including digital disruption, an aging population and gig or contract workers, companies in Thailand need more than ever to revisit their total rewards and compensation and personalise and incentivise the experience for each of their diverse employees.
“A number of companies have already implemented flexible benefits programmes and pay-for-performance incentive models to meet these challenges,” Juckchai said.
Shift to agile rewards
As new roles are created and existing roles change with automation and artificial intelligence, it is becoming more difficult to keep up with employee pay expectations and market values. According to Mercer’s 2019 Global Talent Trends Study, the number one workforce rewards priority is offering more diverse rewards.
The good news is that priorities in human resource (HR) reflect what employees are asking for, both HR and employees agree that offering a wider variety of incentives and differentiating rewards for high performers will make a difference.
To truly align to the business, investments in rewards should reflect a company’s strategic focus. In many cases, this means taking a step away from market norms and moving towards more differentiated offerings to satisfy both changing employee needs and the demand for new skills.
Leading firms are focusing on the overall pay experience and expanding the focus beyond base pay to include career growth, incentives, and recognition.
Puneet Swani, Senior Partner and Career Business Leader/International Region at Mercer said: “As the pace of change accelerates and we enter into this new world of work, companies should rethink how they can be future fit by putting their people at the heart of the change.
“Whether embracing digitalisation, building competencies and skills needed for future competitive advantage or creating the right work environment and culture, changing the way organisations invest in their employees will yield a greater return for the business far into the future,” Puneet said.
THE NATION (THAILAND)/ASIA NEWS NETWORK