Employers have -been utilising financial incentives to impact elements that influence a firm’s capacity to keep their employees
By AMIR AZLAN / pic by TMR FILE
EMPLOYEES’ dissatisfaction with salary and benefits, and a lack of career progression opportunities, are the major reasons for higher-than-usual attrition rates in Malaysia involving its retention rates as the nations are transitioning back to on-site work.
Based on Mercer’s Covid-19 pulse survey, employers now have to deal with labour shortages and return to worksite plans including other issues such as vaccination policies and worksite safety protocols that are constantly evolving as a result of the pandemic.
“Most of the respondents in Malaysia observed a higher turnover rate, especially at the mid-career level compared to past years. “57% of the employers listed employee dissatisfaction with pay as the main cause for attrition, followed by limited career advancement (41%) and the employee’s ability to get better benefits at another company (32%),” Mercer said in a recent statement.
With the increase in turnover involving mid-career professionals, employers are finding it hard to recruit them due to the inability to find the right skills that would suit the price.
“About four in 10 of the survey’s respondents experienced moderate to significant difficulty in attracting senior and mid-career hires, compared to recruiting entry-level positions.
Mercer Malaysia career business leader Koay Gim Soon commented it is unfortunate that the companies in the nations especially small to medium enterprises have to deal with high turnover rates and retrenchment rates at this time, although multinational companies were seen to stepping up their recruitment rate this year to support its business recovery and growth.
“In a market that is still short of skilled workers, mid-career hires are in demand because they have considerable experience and the potential to be groomed as future leaders and with factors such as workplace flexibility becoming the expectation, it is not surprising for employees to look for more than compensation and benefits in their next move,” he said in the same statement.
Employers have been utilising financial incentives such as boosting promotion chances, offering higher than market rate salaries, and instituting retention bonuses to impact elements that influence a company’s capacity to keep their employees.
The statement also noted that the disruption caused by Covid-19 has put the spotlight on factors beyond financial incentives.
According to the survey, respondents felt that while having a reputation as a “great place to work” will help to attract talent as inadvertently the organisation’s culture will benefit the employer to retain talent.
Mercer’s CEO for the South-East Asia Growth Markets Godelieve van Dooren added the pandemic has accelerated the need for employers to reassess their ability to retain talent in the face of a tight labour market and skills shortages. Rather than just focus on what’s driving attrition, employers should consider matters that 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,” she said.