Spotlight on the latest rewards trends across Southeast Asia
Looking back at 2024, the demand for Total Rewards professionals across Southeast Asia has been buoyant amidst global uncertainties, rooted in the fact that remuneration remains closely intertwined with broader talent attraction/retention strategies.
Some markets like Singapore have seen more conservative yet steady growth, particularly within the ‘middle management’ and ‘regional head’ levels, whereas others such as Malaysia, Indonesia, and The Philippines witnessed hiring surges, particularly at the entry-mid level, due to the comparatively lower costs associated with appointing positions in those locations.
Whilst we observe hiring regaining momentum, our latest Frazer Jones research suggests that in most cases, uplifts have remained modest with one-off “sign-on” bonuses becoming less common, and usually only used to make up for inflexibility around base pay increments. In some instances, when sign-ons are not possible, companies have opted for candidates to defer their starting dates by serving out the full notice period despite the increased possibility of buyback and/or change of minds.
Pay Transparency
Pay transparency constitutes another priority within Southeast Asia, partly driven by US regulations related to this and the incoming European Pay Directive in 2026. Although there is still much to be done to address pay gaps and discriminatory pay, compensation data has become more accessible than ever before, therefore, progressive employers are taking proactive steps to improve employer branding and increase trust through pay transparency. Additional factors such as compliance, DEI initiatives, shareholder commitments, and employee retention plans have also contributed to this move towards greater pay disclosure. According to Aon’s 2023-2024 Asia Pay Equity Survey Report, more than 60% of the 350 organisations surveyed have put in place strategies to do so. That said, pay transparency requires a nuanced approach as wage wars and dissatisfactions among current employers could be generated if mismanaged.
Wellbeing
Wellbeing is also increasingly being positioned at the heart of employee experience with employers recognizing benefits are critical when individuals are evaluating an organization. Furthermore, AI and data intelligence continue to help inform organizational benefits strategies with employers leveraging data and analytics to monitor costs and drive decision making. In addition to offering paid vacation leave and comprehensive insurance coverage for both inpatient and outpatient care, organisations are increasingly adopting flexible benefits allowances. This shift is driven by data insights revealing a high demand for personalised benefits. Indeed whilst benefits have remained subsumed under the broader moniker of ‘Rewards’ for much of 2024, standalone benefits or benefits-centric vacancies have begun to make headway again over the past three/four months.
Looking forward to 2025
Looking forward to 2025, organisations on the whole are cautiously optimistic, though the degree differs by geographical markets and industries. For instance, the technology, fintech, energy, manufacturing and Infrastructure sectors will likely see higher projected increments than the others. We also predict that organisational restructuring will be a recurring motif, which ties in with the need for more specialist skills (e.g. job (re)sizings, Rewards harmonisations) to compete in today’s market. In sum, clients/organisations need to be able to communicate their Total Rewards philosophy clearly so that their EVP is evident as many candidates/employees still prioritise compensation, especially fixed cash, as the main avenue of consideration. From a candidate point of view, upskilling (e.g. ability to partner/front stakeholders, including how they conduct themselves during offer negotiations) is vital as competition for operational Rewards proficiencies within Southeast Asia will only continue to intensify.
If you are looking to grow your Reward, HR Data, HRIS, and/or Payroll team, or if you are operating in the Rewards space and wish to consider a career move, please reach out to us today. Charlotte and the team in Singapore, are very happy to support and advise you on all your recruitment needs.
