Employers are challenged to be more innovative.
It has been noted that the unemployment rate in Hong Kong remains stable with a seasonally adjusted unemployment rate at 3.4% in July-September 2016.
According to a release from Aon, however, this has led to a rise in voluntary turnover and higher employee attrition of 15% in June 2015-July 2016 period vs. 12.6% a year earlier.
Gary Chin, Aon Hewitt Rewards Practice Lead, says: "An increase in voluntary turnover amidst a stable job market signals that employees continue to explore better external opportunities and have high demands from their employers. Apart from meeting the talent's needs and expectations, companies face the challenge to devise innovative people policies and programmes to differentiate themselves from competitors in the market and shape a positive employee experience, in order to sufficiently attract and retain critical talent.
When such differentiators are in place, it is also important for organisations to clearly communicate them across the board, as employee understanding can essentially help foster a sense of adequacy and further enhance engagement."
The total attrition rate of 17.7% and rise in voluntary resignation cautions companies to work harder to engage and retain their existing pool of talent. At 26.9%, the services industry has the highest attrition rate and retail employers will find it difficult to retain their talent.
Here's more from Aon:
Aon Hewitt 2016 TCM Study Hong Kong further reveals that employers perceive the same reasons for employee turnover over the past 3 years--better external opportunities, limited growth opportunities within the organisation, and external equity of compensation. To mitigate this, the study found that the top three retention measures, in order of importance, are: 1. Accelerated career development; 2. Timely and meaningful feedback from managers; and 3. Improved work-life balance.
Tzeitel Fernandes, Managing Director of Aon Hewitt Hong Kong, says: "Effective rewards management now requires firms to go beyond benchmarking and market trends. Firms are leveraging technology to increase efficiency and effectiveness of their human resources departments and relying more on predictive analytics to help decision making. For example, analytics can look at insurance claims histories to help design targeted Wellness programmes which will ultimately bring down the cost of the insurance plans as employees become more healthy."
Despite the economic volatility, employers in Hong Kong need to revisit their total rewards and compensation approach, for while they may perceive increasing pay as the reason for employee turnover, employees are considering all aspects of their jobs and rewards as a whole when choosing to stay in an organisation or accepting a new offer of employment.
Do you know more about this story? Contact us anonymously through this link.