SINGAPORE - In a report released today, Hay Group, the global management consultancy, said that for companies to build a productive workforce in the downbeat global economy, companies need to actively motivate their workforce, in particular the Generation Y or next generation workforce.
Hay Group's market assessment was based on a survey that was conducted in September 2012, covering over 505 Singapore-based companies (local and foreign-owned) from both the private and public sectors. They were polled on their business sentiments and salary and bonus projections for the next 12 months.
More than just monetary rewards
As increasing waves of Gen Y employees enter the workforce, organisations and HR professionals said that when it comes to attracting and motivating Gen Y talent, the challenge clearly goes beyond monetary rewards.
According to the report, 20 per cent of the surveyed organisations said that implementing Education/Training financial assistance would help to attract and motivate Gen Y employees. The second most popular measure is job rotations (19 per cent) and overseas attachment opportunities (18 percent).
Furthermore, 69 per cent of the surveyed organisations are constantly encouraging employees to take reasonable risks, come up with innovative and creative ideas to work more efficiently and increase the effectiveness of the organisation.
However, only 55 per cent of the surveyed organisations can positively say that their employees are motivated to go the extra mile or beyond their formal job responsibilities to increase their productivity and performance.
Mr Victor Chan, Regional General Manager (Singapore and ASEAN) for Productized Services, Hay Group, said, "The results imply that the employers' efforts in motivating and engaging the workforce may not generate the desired outcomes, that is, higher levels of employee motivation. This could be attributed to the lack of understanding of the key engagement and enablement drivers which appeals to their employee population."
He added, "Organisations must also retool their Total Reward framework to include non-cash rewards as a critical lever that can position them as employers of choice to attract and retain valuable talent resource in a tight labour supply market like Singapore.
"For instance, the provision of work life balance programmes can be used as a lever to improve employee motivation and drive higher levels of engagement. Some of the common work life balance schemes provided by organisations in Singapore are flexible working hours, work-from-home arrangements, part-time work arrangements, Family Day, and sports and wellness activities.
"Clearly, the opportunities currently available for organisations to improve their bottom line by actively motivating and engaging the next generation workforce have never been so good - and the time to act is now so as to derive a competitive advantage."
Cautious salary increases
The report showed that the actual average salary increases are 4.6 per cent for 2012, a climb of 0.2 per cent this time last year and ahead of the projected 2013 inflation rate of 2-3 per cent anticipated by the Monetary Authority of Singapore.
This year, the Insurance sector can look forward to the highest average salary increase of 5.5 per cent, followed by Fast Moving Consumer Goods and Life Sciences/Pharmaceutical, both at 5.2 per cent.
Mr Chan said, "Employees in developed markets like Singapore face a tough year ahead, with sluggish growth and pay rises slightly outstripping inflation.
"It is vital that leaders use reward budgets wisely - communicating effectively with staff and being creative with the reward programmes on offer that makes the most sense to employees."
Meanwhile, average salary increases for 2013 are forecasted at 4.4 per cent. Industry-wise, the highest average salary increase forecast is dominated by Life Sciences/Pharmaceutical at 5.2 per cent, and both Fast Moving Consumer Goods and Insurance at 5.0 per cent.
The Hay Group report also showed that the actual average variable bonus (i.e. performance-based bonuses excluding annual wage supplement, contractual bonuses) is 2.6 months for a 12-month period, dipping by 0.1 month compared to the average of 2.7 months in September 2011.
A breakdown by employee level revealed that Senior Management will receive an average variable bonus payout of 3.3 months, followed by 2.7 months for Middle Management, 2.4 months for Junior Professionals and 2.3 months for Clerical Support.
Employees in the Chemicals sector will have something to cheer about this festive season with the highest average bonus payout of 3.8 months from the Hay Group survey. Sectors with the next highest actual average bonus payout are Financial Services (3.2 months) and Oil and Gas (3.1 months).
Looking ahead, the forecast average variable bonus payout is 2.5 months for the coming 12 months. The top three sectors with the highest average bonus projection in 2013 are Chemicals (3.3 months), Oil and Gas (2.8 months) followed by Industrial Goods (2.7 months).
Hiring trends for 2013
Despite the continuing uncertainty in the global economy, hiring seems to have picked up in Singapore. According to the report, 58 percent of the surveyed organisations are planning to increase staffing levels, compared to 50 percent this time last year.
A closer look at the job functions revealed that the top five focus of recruitment is on Engineering (33 per cent), Sales (29 per cent), Finance & Accounting (21 per cent), IT & Telecommunications (19 per cent) and Marketing (19 per cent).
Mr Chan said, "Due to the type of economy and mix of industries in Singapore, job functions like Engineering, Sales, Finance and Accounting still accounts for the top three most recruited functions. This observation is consistent with results from last year's market survey."
Positive regional pay sentiments
At a regional development, overall pay will increase by some 7.5 per cent in 2013 in Asia.
According to Hay Group's PayNet online salary database, which contains pay data information for more than 14 million job holders in 20,000 organisations across more than 100 countries, most notably, pay rises in the second generation of high growth Asian economies are racing ahead of those of their colleagues in the region's more developed countries.
For example, in Japan, wages will increase just 2 percent next year. Meanwhile, in less mature markets, including Vietnam (12.8 per cent), Indonesia (10.6 per cent) and the Philippines (8 per cent), wages are still rising rapidly.
China emerges as the biggest surprise, as the intensifying 'war for talent' will see wage hikes of 9.5 per cent in 2013, despite slower economic growth (GDP up only 1.1 per cent from last year).