Want to double your pay? Think about a move to Asia
We all know that for many multinationals, Asia is the place to be. But this means that there’s a huge demand for talented people and not enough of them to go around. And for HR this presents a real challenge:
How do you make sure you’re winning the war for talent without completely abandoning your global frameworks and policies?
There are three main factors I see foreign companies struggling with most:
- Fast growing markets and inflation. Emerging markets in Asia make up the world’s fastest growing region in terms of GDP and many countries also have relatively high inflation. In places like India and Indonesia, where you have both strong GDP and high inflation, not surprisingly employees have really high salary expectations.
- Skyrocketing pay for managers and job-hopping. Markets like China and India are experiencing the highest pay increases in the world. If you receive a solid promotion, such as moving up from a sales rep to an area manager supervising a team, you could expect your pay to almost double. And when you’re hot property, it’s no wonder people see ‘job-hopping’ (switching employers) as a way of getting paid more. Chinese managers typically stay with a company for just three years, and turnover is highest among younger managers. With just a few years’ experience under their belts, 25-30 year-old professionals are finding themselves highly marketable.
- Understanding what matters most to your people in the region. With more than 20 countries and many more cultures in Asia, there’s no one overarching value system or cultural influence. Although there are some common themes in fast growing Asia markets, for example, career development can be viewed as more important than flexible working.
How can you work within these factors to attract and keep the right people?
Arm yourself with local knowledge and be prepared to flex – but not abandon – global policies. And remember, each country is different and might need a different solution. Here are some tips to consider when planning your reward strategy and making sure your people don’t leave for that higher pay cheque:
- When planning salary increases for a country, don’t assume it matches the rest of the region or global frameworks. For example in Vietnam salaries increased by nearly 12% last year, far above that of many Western and even other Asian markets.
- Make sure any policies that impose a ‘cap’ on pay increases can adjust for local dynamics. This way your people won’t feel the need to leave to get a pay rise. We’ve seen firms create ‘mid-steps’ in their pay bands, to create more internal opportunities for promotions and pay rises.
- Another way to hold onto your people is to think about the things they value other than money: things like career development programs, positive working environments and good managers. By creating a workplace that people don’t want to leave you can help offset the pressure on pay.
- But remember – this will only work if your people know what they get working for you – so it’s really important to get your reward communication right.
- Career development can be used as a way to make you stand out in a fiercely competitive labor market and be seen as a ‘reward’.
- In many Asian markets people are comfortable with hierarchy. Seniority and age can play very important cultural roles, so be aware of this when implementing local grade structures. For example, many companies accept that in Korea, the boss should be older than the subordinate, and they see this not as age discrimination but respect.
- Status matters maybe more in Asia than in Western markets. In many cases a job title promotion is even more important than a financial one. It’s very important to make sure global titles have some flexibility for local title use. It is critical to motivating people in the right way.
Above all, don’t forget to create great working relationships with other local HR and compensation professionals and get advice from your people on the ground.
Missed the webinar? Watch the playback to hear my latest presentation on pay trends in Asia.