Attraction and retention challenges remain high in Asia, Tower Watson Survey Finds

Attraction and retention challenges remain high in Asia, Towers Watson Survey Finds

ASIA-PACIFIC, September 14, 2010 – A vast majority of companies worldwide are having difficulty attracting the critical-skill and talented employees needed to help them rebound and prosper in the wake of the economic crisis. However, the severity of their difficulty in attracting these workers varies greatly from country to country as economic recovery is proving to be uneven in different regions, according to a new survey conducted by global professional services company Towers Watson (NYSE, NASDAQ: TW).

The Towers Watson Global Talent Management & Rewards Survey, a study of 1,176 companies globally, including 328 from Asia Pacific, also found that a majority of respondents said the cost cutting measures that they took during the recession and financial crisis had an adverse impact on employees’ work loads, their ability to manage work-related stress and overall employee engagement. As a result, companies are beginning to re-evaluate their reward and talent management programs and how they attract, retain and motivate employees.

According to the survey, nearly two-thirds (65%) of companies globally and about 80% of participating companies in Asia Pacific reported problems attracting critical-skill employees. Six in ten (61%) companies globally, and over 70% of Asia Pacific respondents reported similar difficulty attracting top-performing, talented employees. Interestingly, companies in most regions reported having less difficulty retaining employees than they do attracting. Globally, only 21% of companies are having difficulty keeping employees generally while close to 40% of Asian firms reported problems holding onto employees.

“The business climate has clearly affected both the supply and demand of talent and companies’ ability to attract and hire talented employees,” said Laura Sejen, global head of rewards consulting at Towers Watson. “Even in relatively soft economies, top employees are in short supply. Add to that, workers today simply are in no rush to seek employment elsewhere, given the uncertainty over economic recovery. As a result, many companies find themselves in a position of having to find new and innovative ways to entice and ultimately develop talent and leadership for the future.”

Impact of Cost-Cutting on Employees

The economic crisis forced many companies globally to take cost management or cost cutting activities, although there were significant regional differences in the nature and extent of those actions. The survey noted that Asian companies took the least aggressive measures such as hiring and salary freezes and reduced bonuses over layoffs, redundancies and workforce reductions. These cost cutting steps took their toll on workers. Close to 50% believe their cost cutting actions increased employees’ work loads while 40% said they adversely impacted employees’ ability to manage their work-related stress. About 40% also said these measures had a negative impact on overall employee engagement and workers’ ability to balance their work and personal lives.

“While companies acknowledge the consequences of their actions on the well-being of their employees, they have not made the connection between other well-being items such as a convenient work location, flexible scheduling and time and an employee’s decision to join a company,” said Rachelle Arcebal, Asia-Pacific Rewards Practice Director at Towers Watson.. “And, at a time when labour markets are tight and employers are trying to lure top talent, it’s critically important that employers understand what factors are likely to influence whether an employee joins a company or not.”

An Increased Focus on Talent Management

The survey noted that organisations are likely to increase their talent management emphasis in leadership, succession planning and career pathing over the next three years. When asked what their top talent management priorities were, 62% of companies globally responded ensuring the readiness of talent in critical roles, followed by 60% who said increasing the investment in building an internal pipeline of talent was a top priority. Just over one half (51%) ranked creating more movement, rotation and development opportunities for talent was a top priority.

In Asia Pacific, organisations plan to grow by expanding into new markets and introducing new products and services. The expectation is that there will be a need for additional talent at all levels. Since labour markets are tight, organisations place a premium on developing people ¾ requiring increased investments in the internal talent pipeline and talent acquisition, and emphasizing development of new leaders with new competencies.

About the Survey

The Towers Watson Global Talent Management and Rewards Survey was conducted in May and June of 2010 and includes responses from 1,176 companies from 23 countries, including these seven locations in Asia Pacific – China, Hong Kong, India, Japan, Malaysia, Singapore and South Korea,. The participants represent a wide range of industries and come from a broad cross-section geographically.