Salary hike losing sheen, T&D's the key to retain staff

NEW DELHI: Education and retention go hand in hand. That's what companies across Asia Pacific are discovering. As many as 64% of employers in the region are investing in training and development as an incentive to retain staff as compared to only 27% of employers using base salary increase as a strategy to retain employees. Non-cash incentives such as customer service awards were used by 43% followed by annual cash incentive by 34% of the employers, says a Mercer study on Total Rewards in the Asia Pacific region.

“With the global war on talent showing no sign of relenting, organisations are striving to balance employee value proposition by investing more dollars on training and development and less on base pay to attract, retain and engage employees,” said Mercer Asia Pacific human capital business leader Rajan Srikanth.

Total rewards, according to the study, is a talent management tool that encompasses three factors: compensation, that includes base pay, short and long-term incentives and recognition awards; benefits (including retirement plans, work/life programmes, perquisites) and careers which incorporates stretch assignments, training and development and other opportunities within the company.

According to the study, 92% of the participant organisations felt the most challenging job is attracting and retaining the right talent, especially in the functional areas of engineering, sales and marketing reported. The second most cited problem was the alignment of the companies' total rewards strategy with business strategy with 76% employers voting for it.

The reason being difficulty in execution as businesses need to be nimble and ready to shift vision and directions according to the changing market. Almost 75% of companies also stated that segmenting and differentiating high performers for implementing rewards strategies, is a struggle, due to the lack of research on employee preferences and attitudes.

Around the globe, organisations are being challenged by the task of attracting and retaining the right talent, ensuring employee rewards are differentiated by performance, and building alignment between total rewards strategy and business direction.

More than ever, organisations are required to strategically allocate rewards spend and demonstrate the return on investment of pay, benefits, and career programs. The study which examined the unique features of total rewards practice in over 750 organisations in APAC, took place across 12 markets and in over eight industries.