Rising IT salaries and bonuses in Asia are not helping to retain as many employees as companies hope, according to a new study by human resources agency Hudson.
Released today, the report is based on quarterly surveys of around 2,500 companies from various industries in China, Hong Kong, Japan and Singapore.
More IT and telecommunications (IT&T) companies in China are prepared to offer candidates bigger pay packages in the first quarter of this year. Over 80 percent of respondents expect to increase overall salary by over 10 percent, and 48 percent indicated they would increase pay by more than 20 percent.
In Hong Kong, where about 85 percent of companies expect to beef up their headcount this quarter--due to heavy demand for IT upgrades from financial institutions--32 percent of those surveyed said they would pay at least 20 percent more. In comparison, only 6 percent indicated they would increase salaries by over 20 percent during the same period last year.
The IT&T sector in Hong Kong also plans to dish out higher bonuses, with 46 percent of companies targeting over 20 percent more in bonus payouts, compared to only 6 percent during the first quarter of 2007. Some 25 percent of respondents said they would pay over 30 percent more in bonus payouts--a stark difference from none during the same period last year.
Big payouts for talent
Driven by demand from financial institutions, 84 percent of Singapore's IT companies are planning to increase salaries by over 10 percent, while 17 percent indicated an increase of over 20 percent. Last year, 57 percent and 5 percent of businesses indicated they were likely to boost pay packages by more than 10 percent and 20 percent, respectively.
Yeo Gek Cheng, Hudson's IT&T director for Singapore, told ZDNet Asia the local IT&T sector had experienced "strong growth" in 2007 and quality candidates are "harder to come by" as a result of the strong demand.
"Talented candidates can easily find new positions and companies are often willing to pay a premium for them," she said in an e-mail interview. "It is definitely easy and tempting for candidates to simply 'follow the dollar'."
With hiring expectations expected to be strong, employers also have to address increasing staff turnover.
Nearly half (48 percent) of IT&T companies in China reported a turnover of more than 10 percent, while 35 percent of companies in Singapore experienced the same turnover rate.
Across Asia, there were both push and pull factors contributing to the growth in staff turnover.
Lack of progression--the main reason for the IT&T turnover rate in China--was cited by 27 percent of companies surveyed. Some 16 percent of Chinese respondents also pointed to unsatisfactory salaries or bonus payments as another factor for changing jobs.
In Hong Kong and Singapore, talent poaching accounts for about 30 percent and 38 percent, respectively, of staff turnover.
Singapore-based Yeo said companies that wish to retain talent must focus on retention strategies, which could include creating a conducive work environment, introducing career development programs as well as hiring co-workers with caliber.