Hiring staff is only one part of the employment equation—keeping top talent and developing a happy and engaged workplace is equally important. International companies widely use employee benefits to reward staff loyalty and incentivise performance.
Singapore recently introduced the Fair Consideration Framework to almost universal local support. For the average Singaporean worker, it promised a fair shot at the top jobs going in the local market. This pleased some bloggers... others claimed the CFC didn't go far enough.
Obviously you can't please everyone! But the CFC did draw a line in the sand: the government expects businesses operating in Singapore to be part of the local community and to support Singaporean workers.
In fairness, for most businesses operating in Singapore, be they MNC or SME, the principles of the Fair Consideration Framework make good business sense. Singaporean staff know the local market better than anyone. They are highly educated and internationally well respected. They are the future of any business based in Singapore.
Any business operating in Singapore should prioritize attaining top Singaporean talent
So... what's the issue?
The FCF focuses on the hiring of staff. The added costs of the FCF to business will be, in reality, minimal. But most HR and recruitment managers will tell you that hiring staff is only one half of their job. Retaining high performers is of equal importance. And in an employment market as competitive as Singapore, companies have a difficult time keeping key people.
Staff turnover sits at around 20% in Singapore (varying between sectors). This is high compared to Europe, Australia, and the US. The costs of replacing top talent include training of new staff, a loss of productivity, possible loss of business, and a loss of intellectual property.
On top of all this, the increased compliance costs of the FCF make talent retention even more of a priority. Smart businesses should look at the FCF not only as a wake-up call in relation to hiring practices, but also as a reason to put in place processes to retain the best employees, which doesn't have to mean more money.
Rethinking the way you incentivize top performers and creating a happy workplace
There has been much recent talk in the media and on the blogs about ‘happiness’ in the Singaporean workplace. In the case of the FCF, this policy change focuses on Singaporeans’ access to future opportunities. But, most workers believe this is only part of what makes a good employer.
Individuals also worry about family health care, education, housing, and retirement security. Increasingly, companies address these concerns in employee benefit packages. These are big business overseas.
Employee benefits encourage loyalty and drive businesses to engage with their staff. The better a company understands what their employees want benefits-wise, the greater the loyalty pay-back.
The most successful employee benefit schemes have an increasingly complex ‘bespoke’ component. Naturally, different people will have different priorities and needs. Therefore, the better a company’s benefits package can address these needs, the more effective it is.
Can you afford to do nothing?
HR can now develop sophisticated benefits packages to target the needs of particular staff.A Singaporean with a spouse and two young children is going to have different needs than a Singaporean of the same age who is single.
Smart businesses should address what sort of rewards are important to each of their employees. For the vast majority of businesses, people are the most important asset. Smart employee benefits packages are, perhaps, the best way to build performance, loyalty, and mutual trust.
Communication is the key
Happiness is not always a matter of cold hard cash. Some workers will respond better to a company that cares about their personal circumstances and needs. However, it should be stressed the the most important factor in how someone feels about where they work is their relationship with their immediate line manager.
Given that relationship can vary during the course of an employee’s career at an organization, it’s important that other factors such as benefits are communicated well. Many businesses invest in a good benefits package but don’t invest the same effort in communication.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Peter Jackson is the CEO of Lockton Companies Singapore. He has been in the insurance industry since 2004 and joined Lockton in 2012 having previously worked for Aon and RSA.