It was a “employee’s market” – a third of Asia-Pacific companies they offered higher salaries to attract talent, according to Mercer. But the tables may be turning fears of recession growth, the consulting firm said.
“First of all, companies are starting to be cautious [in] in the second half of the year,” said Puneet Swani, head of Mercer’s careers business for Asia, the Middle East and Africa.
He told CNBC:Squawk Box Asia“on Thursday, one of the five companies in Asia and the Pacific they released hiring freezeswith 40% hiring for critical roles only.
“There’s another 30% of organizations that say hiring decisions require an extra level of approval,” Swani said.
“With all the fears of a recession… the tide may be turning [for employees].”
However, companies are still struggling lack of talent. According to Mercer’s global survey in July 70% of 181 companies in Asia Pacific tried to attract talent, especially those from Japan and China.
This has forced companies to get “creative” in attracting talent, Swani said, through attractive salaries higher cost of living and inflation.
Mercer found that salary increases for 2022 are higher than 2021 across all industries and markets in the region, with some even exceeding pre-pandemic levels.
To retain talent, 42% of companies also provide retention bonuses, up from 31% in 2019, Mercer said.
Solving employee disengagement
However, competing for talent on compensation alone will not be sustainable, Swani said.
“Organizations will have to look at this as a marathon rather than a sprint… [and] look at the broader experience of employees.”
He added: “When you look at the top three drivers disengagement of employeespart of it is ability work flexibly remotely or hybridly.”
Training options are another way for companies to differentiate themselves from the competition.
“[That’s] was a very strong agenda, especially as companies came out of the pandemic, their business models changed,” he said.
Swani added that companies have increased automation and outsourcing, leading to skills gaps within organizations.
“It is [on] employees also mind, how will you help me upskill and retrain?”
In another studyMercer found that 95% of employees in Asia said they had recently acquired a skill. Despite this, the study reported that 97% of companies reported significant skills gaps in their organisation.
Increased mobility
For countries that rely much more on foreign talent, increased mobility as pandemic restrictions will help manage talent shortages, Swani said.
“The whole supply and demand dynamic has really changed for these countries [during the pandemic]which caused a big increase in pay because you have very limited talent.”
He added, “Many countries are open …and business visas are coming [issued]. And I think it will help manage the lack of demand for talent from that point of view.”
