Dissatisfaction with pay and benefits, limited career advancement are key drivers of employee turnover in ASEAN, says Mercer’s latest

PHOTO: Thairath

ASEAN, 22 September 2021 – Faced with a growing shortage of skilled workers and the challenging reality of transitioning employees back to on-site work, companies in Southeast Asia (Indonesia, Malaysia, Thailand, and the  Philippines) are finding it more difficult to attract and retain talent. Dissatisfaction with pay and benefits, and limited career advancement have emerged as the primary drivers of higher-than-usual attrition levels. 

This is according to Mercer’s latest COVID-19 pulse survey that polled more than 850 employers globally. Employers now have to deal with labor shortages and return to worksite plans, including vaccination policies and worksite safety protocols that are constantly evolving as a result of the pandemic. 

Higher turnover but harder to hire mid-career professionals 

Most of the respondents in Southeast Asia observed a higher turnover rate, especially at the mid-career level when compared to past years. 55% of the employers listed employee dissatisfaction with pay as the main cause for attrition,  followed by the employee’s ability to get better benefits at another company (46%) and limited career advancement  (43%). 

With more mid-career professionals leaving their jobs, employers are also finding it more difficult to recruit them, primarily because of the inability to find the right skills at the right price. About half of the survey’s respondents experienced moderate to significant difficulty in attracting mid-career hires, compared to recruiting senior executives (40%) and entry-level positions (10%). 

Employees look for more than just financial incentives 

Looking at factors that influence a company’s ability to retain workers, employers have been using financial incentives such as increasing promotion opportunities (48%), paying higher than market rate wages (31%) and implementing employee referral bonuses (24%). However, the disruption caused by COVID-19 has put the spotlight on factors beyond financial incentives.  

The majority of the survey’s respondents felt that while having a reputation of being a “great place to work” (68%) helps to attract talent, it is eventually the organization’s culture (76%) that helps to retain talent. This is why employers have taken action in areas such as enhancing workplace flexibility as well as providing more well-being and mental health support. 

Commenting on the findings, Godelieve van Dooren, Mercer’s CEO for the South East Asia Growth Markets, said: “The pandemic has accelerated the need for employers to reassess their ability to retain talent in the face of a tight labor market and skills shortages. Rather than just focus on what’s driving attrition, employers should consider what will make their employees stay.  

While there is a tendency to compete for talent using financial incentives and rewards, it’s not sustainable in the longer term and is easily replicated by competitors. More intangible drivers like culture, workplace flexibility, and career  progression will be key competitive differentiators for companies to hold on to their most prized assets – their people.”


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Adam Judd
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