+ All Categories
Home > Documents > Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional...

Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional...

Date post: 10-Mar-2021
Category:
Upload: others
View: 3 times
Download: 0 times
Share this document with a friend
43
welcome to brighter Rewards trends in Asia Pacific Rethinking total rewards during uncertain times 4 November 2020
Transcript
Page 1: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

welcome to brighter

Rewards trends in Asia Pacific

Rethinking total rewards during uncertain times 4 November 2020

Not Peer

Reviewed

Page 2: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 2

Today’s speakers

Puneet Swani, Senior Partner

Career Business Leader

International Region

Godelieve Van Dooren, Partner

Regional Industries & Products Leader

Asia Pacific

Page 3: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 3

Agenda

1. Economic outlook: Economic impact of

the pandemic

2. Talent and workforce insights: Impact of

coronavirus on talent management practices

3. Compensation trends: Implications of

COVID-19 crisis on employee compensation

4. Benefits trends: Implications of COVID-19

crisis on benefits programs

Page 4: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 4

Polling question #1 results

Q: What are your top priorities for 2021 Total Rewards?

You may select more than one option

17.89

26.26

40.4

43.87

55.27

55.99

f)

e)

d)

c)

b)

a) a) Manage and reduce costs

b) Deliver competitive compensation and benefits

c) Redesign incentive plans to align with business objectives

d) Improve digital employee experience

e) Deliver more targeted value to different employee segments

f) Skill-based pay

55.99%

55.27%

43.87%

40.4%

26.26%

17.89%

Page 5: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Economic Outlook

The economic impact of the pandemic

Page 6: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 6

COVID-19 outbreak is lasting longer than expectedEconomic activity has contracted significantly on a global scale

Source: IMA Asia , APAC Executive Brief, Sept 2020

3.6

2.9

1.9

4.5

2.9

2.3

1.3

4.2

-4.9 -3

.7

-7.9

-1.2

5.4

4.0

5.1

5.1

Global US Europe APAC

GDP real growth %

2018 2019 2020f 2021f

How long will the current

coronavirus pandemic

last?

No one knows exactly, it is very hard to predict

In Mercer’s previous regional webinar held in

April, approx. 50% of the attendees expected

the crisis to end by Q3 2020

one of the top concerns for businesses,

according to the World Economic Forum’s

2020 Executive Opinion Survey

“Spread of infectious

diseases” has rocketed

up the rankings to become

Page 7: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 7

Big variations in growth for countries in AsiaUncertainty remains but increasingly optimistic outlook for future

2.8

6.6

2.8

6.8

5.2

0.3

4.8

3.2

6.3

3.4

2.7

2.7

4.1

7.1

1.8

6.1

-1.2

4.9 5.0

0.7

4.3

2.2

6.0

0.7

2.0 2

.7

2.2

7.0

-3.5

2.4

-6.6

-8.8

-1.1

-4.9

-7.3

-5.5

-7.6

-6.3

-1.3

1.3

-6.8

2.3

3.6

6.3

5.0 5

.7

2.9

2.9

5.7

6.7

5.3

5.0

2.5 3

.2 3.5

6.3

Australia China Hong Kong India Indonesia Japan Malaysia NewZealand

Philippines Singapore SouthKorea

Taiwan Thailand Vietnam

GDP real growth %

2018 2019 2020f 2021f

Source: IMA Asia, APAC Executive Brief, Sept 2020

Page 8: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 8

Coronavirus pandemic has created disruptions in the world of workUnemployment rate across the region remains high

6.0 5.1 5.5 5.2 2.9 5.2 3.3 3.1 3.7 3.8 2.4 2.3 1.0

15.3 15.0

9.0

7.2

7.2

5.8

5.3 4.8 4.5

4.33.5 3.4

2.5

12.0

12.0

8.06.6

8.0

5.6

7.0

4.3 4.0

5.0 5.0 5.05.5

India Philippines Indonesia Australia HongKong

China Malaysia Vietnam Taiwan SouthKorea

Japan Singapore Thailand

Unemployment rate, %

2019 2020f 2021f

Source: IMA Asia, Asia Forecast Data, Q3 2020

According to the World Economic

Forum’s 2020 Executive Opinion Survey,

unemployment and underemployment

tops CEOs’ worries for doing business

around the world

Page 9: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 9

Adapting quickly is vital. Businesses will need to tread a delicate balance between economics and employee well-being.

Page 10: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Talent and workforce insights

Impact of coronavirus on talent management practices

Page 11: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 11

1 in 2 organizations in APAC have changed their hiring intentions for 2020 as a result of the COVID-19 outbreak

Source: Mercer 2020 TRS Special Edition

33%

7%37%

22%

1%

Scope of hiring freeze introduced as a result of the current situation

Across all roles / functions

Across all roles / functions exceptreplacement hires

Across all roles / functions exceptcritical roles

Across all roles / functions exceptreplacement hires and critical roles

Other78%

21%

1%

Hiring intention for 2020, if it has changed as a result of COVID-19 outbreak

Hiring freeze

Hiring less than planned

Hiring more than planned

Page 12: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 12

Headcount numbers are being managed cautiouslyMajority of the companies are adopting a wait and watch approach

67% 64% 65%72% 73%

77% 75% 74%78%

73% 74%70%

16%16%

20%

15% 12%10% 10% 12%

12%15%

18%

15%

11% 18% 8%7% 12% 9%

7% 9%6% 7%

5%

7%

7%3%

8% 7% 4% 6% 9% 7% 4% 5% 4%9%

CN HK IN ID JP MY PH SG KR TW TH VN

2020 actions/plans regarding headcount in response to COVID-19 outbreak

No change in headcount Headcount decrease

Not decided Headcount increase

Source: Mercer 2020 TRS Special Edition

India results are preliminary, final numbers may be different

Page 13: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 13

Voluntary attrition rates are trending down while involuntary attrition rates are on a rise

7.6

%

6.5

%

7.9

%

8.3

%

3.5

%

4.2

%

6.5

%

6.2

%

5.6

%

4.9

%

5.2

%

5.8

%

8.0

%

5.6

%

5.3

%

6.2

%

6.3

%

3.4

%

3.6

%

5.9

%

5.1

%

5.0

%

5.1

%

5.8

%

5.2

%

7.3

%

AU CN HK IN ID JP MY PH SG KR TW TH VN

Voluntary turnover for H1 2019 and H1 2020 2019 H1 Voluntary Turnover

2020 H1 Voluntary Turnover

Source: Mercer 2020 TRS Special Edition, 2019/2020 TRS; Data for China is for Shanghai; India results are preliminary, final

numbers may be different; India 2020 voluntary turnover from 2020 Mercer Workforce Metrics Around the World report

5.9

%

5.1

%

3.4

%

5.0

%

4.8

%

1.9

%

3.6

%

4.0

%

3.5

%

2.8

%

2.9

%

3.2

%

2.5

%

7.8

%

7.2

%

15

.1%

10

.8%

4.0

%

11

.2%

15

.1%

6.5

%

13

.5%

7.3

%

9.1

%

7.7

%

14

.4%

AU CN HK IN ID JP MY PH SG KR TW TH VN

Involuntary turnover for 2019 and 2020 2019 Involuntary Turnover

2020f Involuntary Turnover

Page 14: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 14

Yet some companies found it difficult to hire and retain critical talent

14% of the organizations in APAC had

difficulties in hiring employees in a certain

job family during the pandemic; while

10% of the organizations in APAC had

difficulties in retaining employees in a

certain job family during the pandemic

Source: Mercer 2020 TRS Special Edition

Some organizations are offering “premiums” of one form or

another to attract critical talent

12%

of the organizations in APAC granted or are

considering granting special COVID-19 related

bonuses for employees who are critical to meet or

maintain the organization’s current business goals

Job families most difficult to hire/retain in APAC during the pandemic

38%

16%

9%

8%

5%

Difficult to hire

31%

28%

10%

6%

7%

Difficult to retain

Sales, Marketing &

Product Management

Engineering & Science

IT, Telecom & Internet

Finance

Production & Skilled

Trades

Page 15: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 15

For longer-term success, balance cost management with employee experience

As businesses grapple with the

impacts of the COVID-19 pandemic,

cost deferrals and reductions

measures to ensure business

continuity is an important concern

and focus for employers

With considerable economic

uncertainty ahead, the need for

cost management is here for the

long-term so focusing on

employee experience along the

way will be vital for recovery

Page 16: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Compensation trends

Implications of COVID-19 crisis on employee compensation

Page 17: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 17

Polling question #2 results

Q: What is your salary increase forecast for 2021?

23.78

16.88

6.99

24.18

20.48

7.69

f)

e)

d)

c)

b)

a)7.69%

20.48%

24.18%

6.99%

16.88%

23.78%

a) Higher than 2020 (between 1-2% increase)

b) Same as 2020

c) Lower than 2020 (between 1-2%)

d) Lower than 2020 (More than 2% decrease)

e) Salary freeze

f) Not sure yet

Page 18: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 18

Implication of COVID-19 pandemic on salary increase budget15%

61%

12%

62%

10%

57%

14%

58%

13%

57%

13%

61%

12%

61%

16%

63%

12%

52%

14%

58%

9%

58%

13%

63%

13%

54%

10%

55%

55%

14%

53%

12%

58%

16%

57%

15%

57%

12%

57%

16%

55%

11%

60%

12%

60%

18%

50%

15%

57%

15%

53%

14%

59%

15%

59%

13%

30%

20%

35%

22%

32%

23%

29%

23%

30%

29%

30%

20%

32%

25% 23%

23%

28%

27%

36%

24%

33%

22%

34%

17%

29%

27%

31%

29%

4%

4%

4%

4% 2%

3%

3%

2%

3%

3% 1%

5%

5% 4%

3%

AU CN HK IN ID JP MY NZ PH SG KR TW TH VN

% organizations where salary increase budget was affected for 2020 and 2021

Not sure No change Salary increase budget decreased Salary increase budget increased

20 21

AU

20 21

CN

20 21

HK

20 21

IN

20 21

ID

20 21

JP

20 21

MY

20 21

NZ

20 21

PH

20 21

SG

20 21

KR

20 21

TW

20 21

TH

20 21

VN

Source: Mercer 2020 SMS COVID-19 Report, E3

Data for China is for Shanghai

6 in 10 organizations in APAC are uncertain if COVID-19 pandemic will affect their 2021 salary increase budget

Page 19: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 19

Implication of COVID-19 pandemic on salary freezes for employees12% 20%

9%

25%

10% 2

2%

12% 23%

11% 19%

8%

24%

8% 1

8%

17%

17%

13%

17%

13% 23%

11% 2

4%

15% 2

7%

13% 20%

5% 1

6%

23%

69%

18%

65%

17%

67%

19%

65%

22%

67%

23%

65%

25%

71%

25%

75%

23%

72%

22%

65%

15%

65%

26%

64%

24%

68%

20%

72%

64%

10%

73%

10%

72%

10%

69%

13%

67%

14%

69%

11%

67%

11%

58%

8%

65%

11%

65%

13%

74%

11%

59%

9%

64%

12%

76%

12%

AU CN HK IN ID JP MY NZ PH SG KR TW TH VN

% organizations implementing salary freezes for employees in 2020 and 2021

No plans to implement Not sure, monitoring the situation Yes, implementing/considering a salary freeze for all/some employees

20 21

AU

20 21

CN

20 21

HK

20 21

IN

20 21

ID

20 21

JP

20 21

MY

20 21

NZ

20 21

PH

20 21

SG

20 21

KR

20 21

TW

20 21

TH

20 21

VN

Source: Mercer 2020 SMS COVID-19 Report, E3

Data for China is for Shanghai

7 in 10 organizations in APAC are uncertain if they will implement salary freezes for any employees in 2021

Page 20: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 20

Implication of the pandemic on salary reduction for employees45%

49%

46%

49%

47%

52%

38% 47%

43%

46%

44%

49%

42%

47%

44%

51%

35% 4

9%

47%

50%

48%

53%

49%

49%

49%

51%

39%

44%

30%

49%

23%

48%

25%

45%

30%

48%

38% 5

0%

27%

47%

32%

49%

29%

48%

35%

48%

24%

46%

27%

44%

26%

47%

29%

45%

27%

52%

25%

3%

31%

4%

28%

3%

32%

5%

19% 4

%

29%

4%

27%

4%

26%

1%

30%

4%

29%

4%

25%

3%

25%

3%

22%

4%

34%

4%

AU CN HK IN ID JP MY NZ PH SG KR TW TH VN

% organizations implementing salary reduction for employees in 2020 and 2021

No Not sure, monitoring the situation Yes, implementing/considering a salary reduction for all/some employees

20 21

AU

20 21

CN

20 21

HK

20 21

IN

20 21

ID

20 21

JP

20 21

MY

20 21

NZ

20 21

PH

20 21

SG

20 21

KR

20 21

TW

20 21

TH

20 21

VN

of the organizations say that the reductions

implemented due to COVID-19 are temporary for

all or most employees85%

of the organizations adjusted the 2020 salary

increases after communication to employees but

before / after implementation22%

Source: Mercer 2020 SMS COVID-19 Report, E3

Data for China is for Shanghai

1 in 2 organizations in APAC are uncertain if they will implement salary reductions for any employees in 2021

Page 21: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 21

Companies are adjusting their pay policy in view of the increased remote working

28%

10%

16%

46%

Localization of pay for employees who work remotely

Pay at the market rate of the office location

Pay at the market rate of the home location

Pay at a national/country market rate

Not applicable/Other

Source: Mercer Global COVID-19 Survey #6, APAC results

1 in 3 companies in APAC who offered significant

subsidized onsite amenities or allowances of

significant value plan to re-balance the total rewards

offering or shift to financial reimbursements or

allowance for employees working flexibly

10%

16%

25%

50%

Yes, implemented pre-pandemic, no changesto policy

Yes, implemented pre-pandemic, makingupdates to policy as a result of the pandemic

Yes, recently implemented as a result of thepandemic

No

% companies in APAC providing financial support to employees working remotely

Page 22: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 22

Implications on employee compensation2021 merit salary increase

Australia ChinaHongKong

India Indonesia Japan MalaysiaNew

ZealandPhilippines Singapore

SouthKorea

Taiwan Thailand Vietnam

2019 3.0% 6.0% 4.0% 9.6% 7.9% 2.0% 5.0% 2.8% 5.5% 3.9% 4.4% 3.8% 5.0% 8.5%

2020 Actual/Budgeted 2.8% 5.9% 3.6% 9.0% 6.9% 2.2% 4.7% 2.8% 5.5% 3.5% 4.2% 3.5% 4.6% 7.7%

2021 Forecast 2.6% 5.7% 3.5% 8.6% 6.7% 2.1% 4.4% 2.6% 5.4% 3.4% 3.9% 3.4% 4.3% 7.4%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

Source: Mercer 2020 E3 SMS survey, 2020 Global Compensation Planning report;

Data for China is for Shanghai

* Data shown is average merit increase excluding zeroes

Page 23: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 23

Variable bonusMost companies made no changes to payout being made this year

90% of the organizations paid out variable bonus to employees for the performance year 2019 at planned time

For those who did not, 71% cancelled the bonus payout, 20% delayed it and 9% spread the payout over a period of time

Only 1 in 10 organizations decreased the variable bonus target compared to the original value

6% 2% 6% 4% 4% 3% 8% 4% 6% 9% 5% 3%

21% 32% 22% 27%21%

15%14%

27% 24% 20% 28% 29%

55%50%

49%51%

54%57% 50%

50%45% 49% 39% 43%

18% 17%24%

18% 22% 25% 28%20%

25% 23%28% 25%

CN HK IN ID JP MY PH SG KR TW TH VN

Forecasted variable bonus budget for 2020 performance year compared to 2019 actual payout

More than the actual payout for 2019 Less than the actual payout for 2019

Too early to tell No change

Source: Mercer 2020 TRS Special Edition

India results are preliminary, final numbers may be different

Page 24: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 24

Variable bonusBut companies are reviewing their variable bonus policy for future

of the organizations in APAC are considering adjusting variable bonus

policy for the 2020 performance year23%

Source: Mercer 2020 TRS Special Edition

37%

33%

18%

17%

13%

5%

4%

3%

19%

Redefining bonus performance factors

Percentage of target bonus

Percentage of maximum bonus

Variable bonus rate

Eligibility

Remuneration structure remodeling

Frequency of bonus payouts

Bonus deferral

Other

Elements that organizations are looking to adjust in the variable bonus policy for the 2020 performance year

Page 25: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 25

Sales incentives plans are also being revisited

of the organization adjusted or are considering adjusting their

sales incentive policy because of the COVID-19 pandemic

For 37% of the organizations, all departments were affected by the

sales policy adjustment

19%

Source: Mercer 2020 TRS Special Edition

41%

28%25% 24%

12%9% 9%

25%

Sales target Threshold Salesincentives

factors

Offerguaranteed

pay-outs

Maximumsales

achievement

Salesincentive

target rate

Commissionrate

Other

Elements that organizations are looking to adjust in their sales incentive policy because of the COVID-19 pandemic

Page 26: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 26

Long term incentivesMost organizations are not making changes

Source: Mercer 2020 TRS Special Edition

India results are preliminary, final numbers may be different

2%

2%

2%

2%

1%

2%

4%

2%

2%

0%

3%

2%

59%

55%

60%

57%

67%

62%

59%

71%

72%

72%

66%

64%

39%

43%

38%

41%

32%

37%

37%

27%

26%

28%

31%

34%

CN

HK

IN

ID

JP

MY

PH

SG

KR

TW

TH

VN

% organization considering implementing changes for 2020 grants not yet made

Yes No Not decided yet

2%

67%

31%

% organizations implementing changes to its LTI policy in

response to the COVID-19 outbreak

Yes No Not decided yet

Page 27: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 27

There is still significant uncertainty for 2021Though outlook is more positive now compared to earlier this year

Keep a pulse on the market to ensure competitiveness

The market is still moving, and disruption will drive new

patterns as we move into 2021

Streamline merit planning and other compensation

administration activities to stay agile

Decisions are likely to be delayed or change

Make the most of your budget

Organizations with smaller budgets are increasing

differentiation (performance, skills and competitiveness) and

limiting eligible populations

Actions you can take:

Page 28: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 28

Navigating the Pandemic response lifecycleImplications on Total Rewards

respondInitial onset with exponential case growth

and business interruption

returnPeriod of volatility when reopening,

as testing / monitoring is perfected

reinventSystematic, scaled and sophisticated tools for testing and

monitoring, enabling recovery and re-defined work practices

Re

ward

s

Imp

ac

t

Phase 1:

Pay protectionLimited return to work

Mid- to long-term cost management

implemented

Continued workforce composition changes

Cost containment strategies and workforce composition changes

begin to slowly recover and ease

Focus on company performance that can be shared

Enhanced focus on rewarding critical skills; reformulated

incentive plans

Phase 2:

Rewards cost containment

Phase 3:

Workforce composition changes

Peak

Recurring TransmissionCyclical post-peak and resurgence

Page 29: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Benefits trends

Implications of COVID-19 crisis on benefits programs

Page 30: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 30

Polling question #3 results

Q: What are some of the changes you have made to your benefits policies?

You may select more than one option.

28.57

27.61

56.46

31.59

11.54

36.4

f)

e)

d)

c)

b)

a)

36.4%a) Made changes to leave policies (e.g. entitlements, carry forward, encashment etc.)

b) Introduced a monthly allowance to cover for remote

working expenses

c) Continued inclusion/provision of telemedicine and digital

care for employees

d) Enhanced policies for employee mental health and wellbeing(e.g. Promoting healthy work-life balance habits, enhanced

flexibility around working hours, providing access to EAP,

wellbeing apps and online mental health resources etc.)

e) Expanded the suite of benefits included in flexible

benefits policy (e.g. inclusion of WFH expenses incurred, vaccinations, IP/OP

psychiatric and psychology coverage etc.)

f) No changes made to existing benefits policies

11.54%

31.59%

56.46%

27.61%

28.57%

Page 31: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 31

COVID-19 has challenged employer norms around flexible work in numerous ways

Flexibility AT WORKFlexibility FROM WORKWhen, where, what, how and by whom work

gets done

Emergency leave, sick time, caregiving time,

vacation time, parental leave, sabbaticals

Page 32: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 32

The flexible work experience so far

1Iometrics and Global Workplace Analytics, May 2020 2Worklytics, May 20203Mercer COVID-19 pulse surveys4Marsh Risk Consulting, June 2020

Nearly half of employers have more than 75% of their workforce remote during the pandemic.3

These employees have seen ups and downs…

WFH is great. I

can get more out

of my day! I feel more connected

to my manager than

before.

Is it just me or

are my days

getting longer?

Zoom, zoom and

more zoom. When

do I do my real

work?

I’m stressed and

anxious, and I

need some help.

My back hurts from

sitting at the kitchen

table all day.

…And likewise employers have seen mixed results

70%of leaders say

performance is

the same or better

with WFH1

25%more recurring

meetings – and

8% less focus

time2

10-16%projected increase

in ergonomics

workers’ comp

claims4

17%increase in

manager outreach,

and +10%

increase in

manager 1:1s2

15%increase in

employee’s

day length2

67%of employers have

seen increased

utilization of

behavioral health3

Some components

impacting the current

environment will not sustain

post-pandemic

• Extreme social isolation will

not be the norm

• There will be a return to

social support systems

(e.g., schools, eldercare)

• Employees will have the

opportunity to flex between

remote and in-person

collaboration

Page 33: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 33

Three critical questions to drive flexibility at scale

Page 34: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 34

Benefits programs in focusTime loss policies

My employees have a substantial amount of

accrued but untaken annual leave. What can I do?

Carry Forward Leave Policies in APAC

China 88% 5 days

Hong Kong 93% 5 days to be utilized by EOY

Indonesia 83% 6 days to be utilized by end of Q2

India 91% 18 days to be utilized by EOY

Korea 49% 5 days to be utilized by EOY

Malaysia 92% 7 days to be utilized by EOY

Philippines 70% 10 days

Singapore 93% 7 days to be utilized by EOY

Thailand 84% 5 days to be utilized by EOY

Taiwan 61% 9 days to be utilized by EOY

Vietnam 89% 5 days to be utilized by end of Q1

Encouraging your employees to consume their annual leave

Allowing your employees to carry forward their untaken annual leave

Letting your employees encash their unutilized annual leave

Forfeiting your employee’s annual leave

Source: Mercer BenefitsMonitorTM 2020 Q3 Survey Results, Asia Pacific

Page 35: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 35

Benefits programs in focusFlexible working arrangements

69%

54%

69%

64%

67%

62%

62%

54%

76%

66%

55%

24%

22%

17%

24%

29%

25%

25%

43%

19%

20%

13%

7%

24%

15%

12%

4%

13%

13%

4%

5%

14%

33%

Organizations who have implemented or are considering to implement remote working arrangements

Organizations who already had a remote working arrangement in place Organizations with no remote working arrangements

Source: 2020 Mercer Total Remuneration Survey – Special Edition Results, Asia Pacific, data as of October, 2020

Considering all aspects of flexible

working:

Flexibility around when work is done (e.g. flexible scheduling and compressed weeks)

Source: Mercer Global Survey, How are companies flexing for the future and returning to the workplace, Asia Pacific, data as of August, 2020

Flexibility around how work is done (e.g. technology considerations)

Flexibility around what work is done (e.g. project-based activities and automation)

Flexibility around who does the work (e.g. contract and/or gig workers)

Page 36: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 36

One-time subsidy

(in USD)

Monthly Bill

Subsidy (in USD)

China $260 $20

Hong Kong $258 -

Indonesia $272 $14

Japan $247 -

Korea $176 $60

Malaysia $333 $17

Philippines $206 $30

Singapore $250 $63

Thailand $250 $32

Taiwan $661 $17

Benefits programs in focusExpenses coverage for remote working expenses

of employers in APAC provide their employees

who are working remotely with financial support50%1

* Based on currency exchange rate as of Oct 28, 2020

** All amounts provided are median values

Source: 2020 Mercer Total Remuneration Survey – Special Edition Results, Asia Pacific, data as of October 2020

Source: Mercer Global Survey, How are companies flexing for the future and returning to the workplace,

Asia Pacific, data as of August, 2020

12%

12%

23%

29%

43%Internet Service & Utilities

Computer Equipment

Office Supplies

Ergonomic Office Equipment

Additional Technology &

Virtual Collaboration Tools

Source: Mercer BenefitsMonitorTM 2020 Q3 Survey Results, Asia Pacific

Page 37: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 37

Benefits programs in focusHealth

Top 3 Concerns of both Employers and Employees:

E M P L O Y E E S E M P L O Y E R S

Vaccinations Health ScreeningsAnnual Physical Exams

Source: External Employee Survey, Oliver Wyman Analysis & Perspectives

Source: External Employer Survey, Oliver Wyman Analysis & Perspectives

More than 50% feel that the coverage of employee

health benefits is adequate, but there is potential to

broaden the types of offerings

75% stated that COVID-19 has increased

awareness of risk of infectious diseases

53% mentioned that they would use the COVID-19

vaccination as an opportunity to get other

vaccinations

Only 40% currently cover supplementary health

benefits, such as health screenings and vaccines

However, 55% of employers are interested in

expanding their program to include additional

vaccinations

58% of employers have stated that they are looking

to maintain their healthcare budget with an increased

focus on cost management and have plans to

leverage on technology

Page 38: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 38

Benefits programs in focusMental wellness

Page 39: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 39

Examples of employer initiatives to manage through these unprecedented times

Provision of additional family

and childcare benefits

Care packages sent to employees

Virtual Social Group Activitiese.g. cooking challenges

Extension and Expansion

of leave policies

Measures to support Mental

Health of employees

Delivery service perks and

discounts for food and groceries

Complimentary COVID-19

Special Coverage for employees and eligible

dependents

Funds for colleagues experiencing

personal financial crisis

Extended work from home

and flexible working policies

Page 40: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 40

Employers need to prepare for success in an altered worldNow is the time to rethink and reevaluate

Enable informed decisions about

compensation and benefits

especially during today’s uncertain

times

Total rewards has always been a

critical element of business planning

Knowing how your total rewards

programs are positioned is essential to

weathering the current difficult times

and to be prepared to take advantage

of the coming recovery

Page 41: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

welcome to brighter

Page 42: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Copyright © 2020 Mercer (Singapore) Pte. Ltd. All rights reserved. 42

Q & A

Puneet Swani

Career Business Leader,

International Region

[email protected]

Godelieve Van Dooren

Regional Industries & Products Leader,

Asia Pacific

[email protected]

Page 43: Rewards trends in Asia Pacific Rethinking total rewards ......In Mercer’s previous regional webinar held in April, approx. 50% of the attendees expected the crisis to end by Q3 2020

Recommended