With the Hong Kong unemployment rate at a 20-year low and the rise of new work trends such as the gig economy, how can HR effectively use compensation and benefits as a weapon in the war to recruit talent?
How can HR use employee benefits to sweeten the deal when recruiting talent? It’s a question that human resources practitioners will continue to grapple with as a more nuanced and targeted benefits package will need to put on the table in Hong Kong. After all, with the city’s low unemployment rate, ageing population and disengaged younger generation, securing the right person for the job is an increasingly tricky proposition.
“From an attractiveness standpoint, it’s getting more and more interactive,” said Bianca Wong, global head of rewards and VP, HR North Asia, at professional construction company Hilti, when asked by Human Resources about the importance of a finding the right compensation package when try to secure the ideal person for a role.
“(Candidates) don’t necessarily come to you about money, but they come to you about what the conditions are like. ‘Do I need to work long hours? Do I need to travel a lot? What reward to I get for my family if I need to move overseas?’”
“I consistently get asked these questions when I recruit people. So I think these sort of personal needs are becoming more of a priority. People are getting more proactive about asking for what they want,” she added.
The concept of wellness and mental health in the workplace is also getting increased traction, with healthcare benefits getting more focus in C&B packages.
“I also see something very interesting in health benefits. Many companies offer health benefits already. Previously when I’ve been recruiting it’s been like ‘I know what the company is offering and that’s about it,” said Wong.
“These days – particularly in Asia – I am seeing candidates more particularly ask about the details of the health benefits. It seems to me that there is no official survey (anecdotally) but that healthcare benefits are important for candidates to attract them. And I think goes part and parcel with the well being and so forth. It is becoming a serious consideration factor.”
EePing Yeoh, APAC Head of Talent Acquisition at New York-based professional learning firm Gerson Lehrman Group (GLG) concurs, pointing out that an adequate healthcare component is essential to a good benefits package.
“It really depends on the seniority of the positions but in summary we are trying to reward top performers by giving very generous healthcare benefits, a performance-driven bonus (and) a flexible working arrangement,” said Yeoh.
She added that some other sweeteners such as a company-wide summer party, Friday happy hour and year-end party could also make the package more appealing.
While being a strong band can be an inducement to some candidates, every company can’t be a Google – a strong and appropriate employee benefits package remains crucial.
“It’s totally key to provide an overall package that’s on par with what the market is offering. We hire a lot of young talent and it’s key to think creatively and provide something more than what the competitors are providing to attract and retain top talent,” adds Yeoh.
A 2017 study by Robert Half estimates that by 2020, more than half of the global workforce will be millennial-aged. With the bulk of the modern-day workforce about to consist of millennials, engaging this demographic with a seductive C&B package is crucial.
“Millennials are ambitious and expects fast career growth. We need to meet their expectations otherwise we will lose them to our competition,” said Cecilia Leong VP for Human Resources, Greater China at hotel and hospitality firm Marriott International.
There will be more unique packages offered, more specific to the employee’s needs rather than following an industry standard. This whole concept of benchmarking is going to go away.
Riffing on the gig economy
Another consideration for HR to factor into the mix is the rise of the gig economy. While this has largely evolved on the back of ride-hailing companies like Uber and Didi and food delivery outfits like Deliveroo and foodpanda – employing a relatively low-skilled or intransient workforce – this is changing.
“Right now, the gig economy is a headache for a lot of HR professionals,” said Wong from Hilti.
The gig economy now includes a pool of highly skilled professionals with a sought-after area of expertise seeking short-term assignments –nursing mothers, retirees and those on a career break, for example.
This new band of “giggers” is also given rise to trend in so-called portable benefits.
“In terms of the gig economy, people will embrace these portable packages,” said Wong.
“Pensions are always a good example where you only get the full thing when you’ve been with the company for 10 years – I think that sort of idea is going to fade away. If you can offer portable benefits then people can basically move from one place to another. That attracts the person to come to you because they know it gives them some sort of flexibility,” added Wong.
“So I think on that front more companies are going to collaborate (on this) because portable benefits don’t work if just one company does it.”
Vendor platform in the United States are already embracing this concept in locations such as Silicon Valley, with platform sharing between tech companies. Microsoft is one that has already apparently signed up. So in this way, when an individual moves to the next company, hopefully they are also signed up with the platform – then the longevity of the benefits will be held through the platform.
“I hope that this will also catch on in Asia. Especially as we have a large number of SMEs who would benefit from it. SMEs often struggle to offer a competitive package compared to the multinationals. But for example in a fintech company, say about 30 people, they do great business and they need great talent – and these sorts of platforms would really help them,” said Wong.
Wong believes such initiatives are going to become mandatory as the workforce becomes increasingly fluid.
“In future it’s going to be a much smaller pool of regular staff and a much larger pool of giggers,” she added.
In future it’s going to be a much smaller pool of regular staff and a much larger pool of giggers. Right now, the gig economy is a headache for a lot of HR professionals
Horses for courses
Of course, employee benefits are differentiated across sectors – what’s passé in one sector may be highly prized in another. What works in one industry might be a flop in another.
“In Hong Kong, we focus on hard-to-fill positions which dictates that there is a level of price elasticity. So total compensation inclusive of both basic remuneration and bonus is what is important for most of our candidates,” said Abimanu Jayakumar, Head of Selby Jennings, Hong Kong – a recruitment firm specialising in finding roles for banking professionals working within Hong Kong.
While employee benefits demands in a supply chain / manufacturing industry recruitment firm bringing professionals to Hong Kong for a role has a different focus.
“The amount of annual leave, short- and long-term incentive plan, signing bonuses, the relocation package (housing, transportation, schooling, meals, etc) and gym memberships” are all key components in the compensation package, said Randy Chan, head of supply chain recruitment firm DSJ Global, APAC.
According to Jamie Thorpe, head of Phaidon International, Hong Kong, who hires people to join the firm as recruiters, “As we are a sales firm, the commission is a key pull factor, however over the last few years more graduates are concerned with flexibility and health benefits.”
Where to next?
With such a varied and dynamic landscape, human resources will need to keep on their toes to continue to deliver the best employee benefits package when securing talent for a new role.
“The best trend for me is evolving away from the one-size fits all program. It’s becoming much more customised, personalised, individualised. I think in Hong Kong the concept of benchmarking, seeing what other companies are doing – that concept will go away.” said Wong from Hilti.
And while companies, and the individuals that make them up, are very different –from manufacturing, to retail sales, to a fintech start-up – the one consistent aspect for HR pros is that they will need to become more creative with their compensation packages.
“There will be more unique packages offered, more specific to the employee’s needs rather than following an industry standard. That to me is the biggest trend. And I think because of this, this whole concept of benchmarking is going to go away,” concluded Wong.
Human Resources magazine, Hong Kong, Quarter 2, 2019