As seen in our 2017 Asia Salary Snapshot, our annual salary guide for professionals in Asia, salary is one of the most important factors for job seekers when considering moving into a new role.Download our 2017 Asia Salary Snapshot for free! Download now! We were recently quoted in an article in People Management magazine about how companies in Asia are increasingly rewarding employees based on perfomance and reducing year-end bonuses, but offering higher salaries instead. Please read the full article below.
Rewards are increasingly being linked to performance instead of long serviceA one-month bonus ahead of the Chinese New Year holiday remains common, but the last few years have seen a move to more performance-based bonuses. For those in financial services in particular, expectations have been considerably reduced.“There has been a decrease in bonuses over the last two years. They are now driven by market factors, and less profit means smaller bonuses,” said John Mullally, director of Hong Kong Financial Services & Shenzhen at Robert Walters. Mullally says that, relatively speaking, there has been a greater increase in base salary than bonuses. Employers prefer to pay a higher fixed salary over varied compensation such as bonuses.
The financial services industry, traditionally one of the markets with the greatest prevalence of bonus-driven salaries, has seen the biggest decrease, but the end-of-year rewards are still higher than most other industries. Employees right across south east Asia are equally likely to receive bonuses, but Mulally says that expectations are greatest in emerging markets such as Malaysia.
Nick Lambe, managing director at Links International in Hong Kong, says there has been a trend over the last five to 10 years for the bigger banks to reward employees with a combination of cash and deferred stock awards or options. What has changed recently is the emphasis on the amount of deferred stock and cash, with less cash handed out.“Traditionally, financial services would have been seen as the highest payout, but with the changes in regulations and performance, this would be less true today,” said Lambe. “Senior executives within large multinational organisations that are performing well can still see high bonuses.”Across all industries, bonuses are increasingly linked to performance, says Dr Jamie Cheung, programme director of the Masters of Human Resources Management at Hong Kong Baptist University.“Even Japan, which had a tradition of giving long-service bonuses, is moving away from that system and adopting performance-based ones,” said Cheung.She also notes that while most of the region hands out bonuses just before Chinese New Year, in multicultural Indonesia the annual reward is given depending on the employee’s religion.
“If you are Muslim you get it before Ramadan, if Christian before Christmas and if Chinese then before Chinese New Year. And unlike the rest of Asia, in Indonesia there is legislation in place to guarantee workers a one-month bonus,” said Cheung.
Falling bonuses in the financial sector have made headlines – last month, struggling Deutsche Bank announced it would drastically cut bonuses, with the management board waiving its own bonuses for the year – but overall the sector still sees the generous rewards. JobsDB’s recent Hiring, Compensation & Benefits Survey Report 2017 found that financial services provided the highest average performance bonus (2.7 months of basic salary), followed by property development (2.2 months). The manufacturing sector had the lowest average, at 0.3 months.
In mainland China, 50.9 per cent of white collar workers did not get a bonus in 2016, according to a report by the career platform Zhaopin. It found that almost 40 per cent of them would seek to switch jobs based on their year-end bonus. But while cash is king in China, with 95 per cent of bonuses given this way, elsewhere employers are looking at other options.“We are seeing some people look at offering a total package, thinking about enhanced pension schemes, ORSO [retirement schemes], and housing allowances,” said Lambe.And Cheung notes a trend towards offering employee stock options, particularly in the technology sector and among startups.“How they are received will depend on the organisation. Several months ago, Tencent gave employees stock as a reward and they’re very successful. But in India, people would rather get a cash bonus than stock options,” said Cheung.
For more information about salary trends in Asia, download our 2017 Asia Salary Snapshot or contact us to have a conversation about how we can take your career to the next level.