Ms.

Kulapalee Tobing
Regional Industry and Solutions Leader - APAC
Mercer Singapore
© Talentnet 2021. All rights reserved.
 Changing Landscape
of Talent and Rewards
in Asia-Pacific
Kulapalee Tobing

22 October 2021

welcome to brighter
 Agenda

Economic outlook: Effect of the pandemic on microeconomic

1 environment and employment landscape

Talent and workforce insights: Impact of coronavirus on talent

2 management practices

Compensation trends: Implications of COVID-19 crisis on

3 employee compensation

3
© 2021 | in association with | All rights reserved.
Economic outlook
Effect of the pandemic on microeconomic environment and employment landscape
 Global economy on firmer ground, but with divergent recoveries
amid high uncertainty

Faster and stronger economic

GDP real growth % recovery than seen after the
global financial crisis

7.0
6.7

6.5
5.1
4.8
4.5
The boom we are likely to see in 2021 will
4.4

4.2
3.5
be led by consumers in the developed
2.8

2.2

world as economies reopen

1.3
Emerging economies will benefit from this
strong growth, but many will only see the full

-0.9
benefit from the vaccine rollout in 2022
-3.3

-3.5

-6.6

High uncertainty surrounds this outlook,

related to the path of the pandemic, the
Global US Europe APAC
effectiveness of policy support to provide a
2019 2020 2021f 2022f bridge to vaccine-powered normalization,
and the evolution of financial conditions

Source: IMA Asia, APAC Executive Brief, July 2021 5

© 2021 | in association with | All rights reserved. IMF, World Economic Outlook, April 2021
 A widening gap between markets that are rebounding and those still
struggling with COVID-19
GDP real growth %

8.5

7.2

7.2
7.0
6.9

6.8
6.6

6.5
6.3
6.2
6.1

6.1
5.8

5.6

5.5
5.0

5.0
4.9

4.8

4.6

4.6
4.4

4.4
4.0

3.7
3.5

3.5
3.4

3.1
3.0

2.9
2.8
2.4

2.4
2.3

2.3
2.2
1.9

1.9

1.3
0.0

-1.0
-1.7

-2.1
-2.4

-4.8

-5.4
-5.6
-6.1

-6.1
-7.0

-9.5
Australia China Hong Kong India Indonesia Japan Malaysia Philippines Singapore South Korea Taiwan Thailand Vietnam

2019 2020 2021 2022f

Source: IMA Asia, APAC, Executive Brief, Sep 2021 6

© 2021 | in association with | All rights reserved.
 Coronavirus pandemic has brought disruption in the world of work
Employment recovery is projected to accelerate in the second half of
2021, provided there is no worsening in pandemic situation
Unemployment rate, %

8.0
7.5
6.8
6.0
7.0 5.6
6.6 4.9 4.8
5.8 4.1
5.2
4.8 3.2
4.3 4.3 2.7
4.0 2.5 2.4
1.7
2.8 2.4 2.2 2.2
1.2
10.0

10.6
5.1

5.5

3.3

2.8
7.4

8.0

5.2
6.5

3.3
4.5

2.9
5.6

5.2
5.6

3.8
3.9

3.7
3.9

2.2

2.3
3.1

2.4

1.0
2.5
Philippines India Indonesia Australia Malaysia Hong Kong China South Taiwan Vietnam Singapore Japan Thailand
Korea
2019 2020 2021f 2022f

7
© 2021 | in association with | All rights reserved.
Source: IMA Asia, Asia Forecast - Q2 2021
 Hiring intentions
Companies hiring more in 2021 but still not at pre-pandemic levels
Hiring intentions for 2019, 2020 and 2021

5%

5%

5%
5%

6%

6%

6%
6%
6%

6%

6%
6%

7%
7%

10%
10%
10%

10%
10%

10%

8%

8%

8%
8%
11%
11%

11%
11%

9%
9%
9%

12%
12%

13%

13%
14%

14%

15%

15%
15%
22%

22%

37%

38%
46%
50%

47%

55%
56%
51%
39%

55%

54%

59%
50%
52%
52%

58%

48%
54%
60%

57%
58%
57%

65%

67%
71%
58%

71%

72%
66%
54%

73%
63%
65%
45%

61%

71%
62%
72%
76%
53%

74%
71%
57%

58%
49%
47%

45%

44%

42%

40%
39%
39%
39%
38%

38%
37%

37%

35%
34%

34%

33%
33%
32%

32%

32%
31%

30%
28%

27%
26%

25%

25%
24%
24%

23%

23%
23%

22%
20%

19%
17%
15%

15%
14%
1 20
19 2 21
3 4 19
5 20
6 21
7 8 19
9 10111213141516171819202122232425262728293031323334353637383940414243444546474849505152535455
20 21 19 20 21 19 20 21 19 20 21 19 20 21 19 20 21 19 20 21 19 20 21 19 20 21 19 20 21 19 20 21 19 20 21
AU CN HK IN ID JP MY NZ PH SG KR TW TH VN

Add staff No change Reduce staff

8
© 2021 | in association with | All rights reserved. Source: Mercer 2019/2020 Workforce Turnover Around the World report
 Businesses are reinventing
in response to the pandemic
More flexible, sustainable work models and
business practices are the keys to helping
companies address today’s realities and
tomorrow’s challenges
Talent and workforce insights
Impact of coronavirus on talent management practices
 Remote working
Who are you “co-working” with?

66% of respondents said that they are

interrupted by others in the household of up
Children to 5 times on a daily basis.

Significant
You Roommates
Other

Pets

Source: Telework in the Time of COVID-19, Society for Human Resource Management 11
© 2021 | in association with | All rights reserved.
 Remote working
The future working model is hybrid

Flexibility Model
Office Driven Remote First
Culture Culture

Predominantly Distributed Model Hybrid Model Remote-First

Office-Based or Fully Remote

20% 3% 73% 4%
Employees to be back in A significant portion of Employees are allowed Remote working is the
the office once majority employees to work to work remotely (e.g. default way of working
are vaccinated and in remotely, embracing a up to 50% of the week and office spaces are
line with health advisory distributed workforce or less) and for seen as spaces for
guidelines model with local “hubs” individual managers to collaboration and
approve for remote community building
working arrangements

12
© 2021 | Source:inMercer
association with Working Policies
2021 Flexible | All &rights reserved.
Practices Survey, Asia Pacific
 Flexible Working
The future working model is hybrid

54% of employers in APAC are in the

process of implementing/actively
developing a long-term strategy for their
organization’s flexible working plans

Who is eligible for flexible working?

How do we define a hybrid role?

Should we repurpose our benefits

for hybrid working?

13
© 2021 | in association with | All rights reserved. Source: Mercer 2021 Flexible Working Policies & Practices Survey, Asia Pacific
 Flexible Working
What are some role-based factors?

63% of companies in APAC use the nature of work as the main criteria to
determine the flexibility for remote working assignments.

Onsite requirements 89%

(equipment, location, etc.)

Customer needs/experience 81%

Need for face-to-face 72%

collaboration
Interdependence 51%
with other functions
Impact on productivity 51%
or pace of work

Security considerations 43%

Impact on the quality of work 41%

Visibility of job outcomes 34%

Source: Mercer 2021 Flexible Working Policies & Practices Survey, Asia Pacific 14
© 2021 | in association with | All rights reserved.
 Flexible Working
Supporting employees in this new normal

Remote Company-provided office supplies Care/Protection Packages Onsite

(e.g., paper, pens, and post-its) (Masks, Wet-wipes, Face
Working Virtual Wellness Support Shield, Hand Sanitizers) Working
(Telehealth, Yoga, Financial talks)

Transportation Benefits
Home Office Incentivizing vaccinated employees (Company bus, reimbursing cost of
Set-up Allowance
private hire vehicles)

Cash Bonuses for

Reimbursement of taking vacations Food Catering
telecommuting expenses

15
© 2021 | in association with | All rights reserved.
 Flexible Working
Home office set-up budgets tend to be region wide
Monthly Reimbursement of Home office set-
Market Internet/ Utilities Expenses up Allowances Prevalence
(in USD) (in USD)
10%
27 522
7%
42%
14 271
41%
13%
11 420
18%
16%
29 477
10%
17%
26 239
21%
16%
48 491 10%
17%
47 474 13%
13%
* 372 10%
12%
30 506 5%
4%
* 407 9%

16
© 2021 | Source:inMercer
BenefitsMonitorTM,
association with 2021 Q3| release, Allreserved.
All rights Industries results
 2 of 3 companies in APAC have implemented or are actively
developing a long-term flexible working strategy
Majority of the employers in APAC say remote Work arrangements that companies in APAC are planning
working had no negative impact on productivity, to offer as part of future-state policy
collaboration, or employee development
% of companies

Impact of remote working Full-time remote working 32% (▲22% vs prior to pandemic)
Part-time remote working 76% (▲46% vs prior to pandemic)
Flex-time 75% (▲12% vs prior to pandemic)
Productivity 16% 78% 6%

2 in 3 companies say they will limit the number

of days that an employee can work remotely
Collaboration 10% 67% 23%

The pandemic pushed companies to quickly

Employee adopt new behaviors that are likely to persist
8% 75% 17%
Development
Remote / flexible working is expected to
continue, though less excessively than at
Increased Consistent Decreased pandemic’s peak

17
© 2021 | in association with | All rights reserved.
Source: Mercer 2021 Flexible Working Policies & Practices Survey; APAC results
 Remote working
Key Priorities for a sustainable Hybrid working model

Quick to Change,
Easy to Implement,
Superficial
Onboarding
revamping processes for a remote workforce

Communication
creating a comprehensive change strategy

Health & Wellbeing

rethinking strategies to support a changing workforce

Employee/Manager Enablement
training and/or upskilling

Hard to Change,
Culture & Beliefs
Difficult to Implement, creating a more supportive culture for flexible working
Deep

18
© 2021 | in association with | All rights reserved.
Source: Mercer 2021 Flexible Working Policies & Practices Survey, Asia Pacific
 Mental Wellness
FOGO and FONO

FOGO FONO
Fear of Going Out Fear of Normal
• Scared and anxious of going out, even when • Social anxiety and emotional whiplash
it is safe caused by the stress about getting back to
pre-pandemic ‘normal life’
• Perception that something scary is out there,
even after being told the danger is no longer • Experiencing emotional roadblocks in the
present road of returning to normalcy

19
© 2021 | in association with | All rights reserved.
 Turning health risk into value:
Mental well-being
Mental well-being
Investing in your employees

1 in 2 companies in APAC (and 2 in 3 globally) have seen indications

of employee burnout and pandemic fatigue worsen in recent months

Extra benefits or programs being provided by companies to reduce

stress or to raise employee morale

Leadership encouragement to use their paid time off 56%

47%

Physical well-being apps or online classes 41%

32%

Meditation or relaxation apps or classes 36%

23%

Workstyle changes (e.g., no-camera days, no- 22%

meeting days) 19% Global

20% APAC
Extra time off, including early closing or days off 14%

Programs to address social isolation 16%

12%

Source: Mercer 2021 Survey #2: Vaccines, well-being and travel 20

© 2021 | in association with | All rights reserved.
 Physical wellbeing
COVID-19 Vaccination
Share of population vaccinated against COVID-19
Singapore 77% 3%
Cambodia 64% 13% of employers in APAC
71% 5% do not offer an incentive for
69%
China

South Korea 45% 29% their employees who are

Malaysia 58% 12% getting the COVID-19 vaccine
Japan 60% 10%
Sri Lanka 54% 13%
Additional paid time off to employees getting vaccinated
New Zealand 37% 29%
Australia 41% 21%
Yes, additional paid
time off 54%
Hong Kong 55% 5% 29%
Taiwan 9% 42%
India 16% 29% 3%
Yes, additional
Thailand 23% 19% 4%
unpaid time off
Indonesia 8% 23%
Vietnam 17% 14% 44%
No, employees
Pakistan 11% 14% 67%
must use their
Philippines 15% 8% existing vacation, For employees to get the
Bangladesh 10% 5% sick, COVID-19 vaccine
Myanmar
or other paid time For employees to recover from the
6% 4%
off side effects of the COVID-19 vaccine
21
© 2021 | in association with | All rights reserved. Source: Our World in Data, Share of people vaccinated against COVID-19; data as of 26 Sept 2021
Source: 2021 Mercer Asia Pacific Benefits Snap Poll
 Summing it Up
A Look Across the Spectrum
Flexible Working Physical Wellbeing Mental Wellness
• Maintaining social distancing at the workplace;
• Setting up a remote working framework
masks on and setting a daily office capacity limit • Setting up an Employee Assistance Program (EAP)
• Providing employees with necessary equipment
• Ensuring a safe workplace for all: encouraging • Regularly scheduling teams/company–wide
for telecommuting (e.g. laptop, secure VPN
Basic

voluntary declaration of vaccination status and activities (e.g. games day, workout activities)
connection, virtual meeting tools etc.)
providing ART kits for regular testing • Introducing employee-facing webinars in
• Clear and concise communication for company-
• Encouraging a healthy lifestyle through incentives collaboration with third-party providers on mental
wide changes, especially to employee benefit
and challenges health issues and stress management related topics.
programs and policies

• Including digital healthcare services as an

• Reimbursement of remote working expenses • Training managers to recognize behavioral
Intermediate

employee offering
incurred (e.g. internet/utilities bills, mobile phone health issues and directing employees to
• Expanding medical benefits to include
bills etc.) appropriate resources
dependent coverage
• Providing employee care packages (e.g. snacks, • Tailoring mental wellbeing programs that suit
• Working with insurers/ brokers to ensure that
fruits, masks, hand sanitizers, anti-bacterial wipes employee demographics with external providers
COVID-19 treatments are covered within
etc.) • Embracing employee mental health as a part of
company’s medical insurance plan
• Enhanced employee wellbeing benefits Employee Value Proposition (EVP) branding

• Partnering with third-party providers to offer

• Introducing voluntary individual insurance
programs and services catering to the entire
programs or opt-ups
• Fostering and creating a more supportive spectrum of mental health issues
• Reimbursing employees for private hire
culture within the organization for flexible • Developing and implementing a
Advanced

transportation costs incurred during their

working communications plan to de-stigmatize
commute to the office; encouraging minimal
• Providing amenities through services for acknowledging and managing mental health
unnecessary contact with general public during the
employees (e.g. delivery services, laundry services, issues, as well as how to optimize the offerings
pandemic
entertainment subscriptions etc.) provided by employers
• Provision of regional/worldwide medical
• Granting employees a pandemic bonus • Expanding both inpatient and outpatient benefits
coverage and access to care
to include mental health and psychiatric
treatments
22
© 2021 | in association with | All rights reserved.
Compensation trends
Implications of COVID-19 crisis on employee compensation
 Current disruptions provides a unique opportunity for
organizations to holistically rethink their total rewards philosophy
Companies planning to review their total rewards
and/or global benefits strategy in the near term in
light of the changing environment

Yes, total rewards strategy 41%

Yes, global benefits strategy 18%

No 40%

Not applicable 10%

24
© 2021 | in association with | All rights reserved.
Source: Mercer 2020 global COVID survey #7
 The Changing Landscape of Benefits
Key Drivers for Change

71%
OF EMPLOYERS IN ASIA ARE
REVIEWING OR CHANGING
T H E I R B E N E F I T S PA C K A G E 85% 73% 72% 62%
THIS YEAR… Attract & Response to the Employer Cost
Retain effects of Branding Optimization
Employees COVID-19

25
© 2021 | in association with | All rights reserved. Source: 2021 APAC Benefits Snap Poll, based on percentage of respondents who strongly agree or agree.
 Companies are adjusting their pay policy in view of the growing
remote workforce
Market rate for remote worker compensation in APAC Pay adjustment by APAC companies for
existing employees who relocate

Yes, employees will receive a pay

30%
cut if new location is in a lower 4%
cost of labor market
40%
Possibly, if their existing pay
exceeds the new location market 9%
rate

5% No, but their pay may be frozen if

they exceed the new location 4%
market rate
12%
13% No adjustments will be made in
47%
this situation
Pay at market rate of primary office location
Pay at market rate of employee’s home location
Pay at national rate, regardless of office and home locations Unsure/Other 35%
Pay driven by recruiting labor market (e.g., national, regional, and local)
Unsure/Other

26
© 2021 | in association with | All rights reserved. Source: Mercer 2021 Flexible Working Policies & Practices Survey, APAC results
 Implication of COVID-19 pandemic on salary freezes or salary
reductions for employees

% organizations in APAC implementing salary % organizations in APAC implementing salary

freezes for employees in 2021 and 2022 reduction for employees in 2021 and 2022

67% 86%
No plans to implement No plans to implement
39% 47%

Considering/planning to 17% 2%
implement for all/some Considering/planning to implement
employees 1% for all/some employees 0%

16% 12%
Not sure Not sure
60% 53%

2021 2022 2021 2022

27
© 2021 | in association with | All rights reserved. Source: Mercer 2021 E2 SMS COVID-19 Report
 2022 Merit salary increase - All Industry
Future outlook is more optimistic
10.0%

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%
New South
Australia China Hong Kong India Indonesia Japan Malaysia Philippines Singapore Taiwan Thailand Vietnam
Zealand Korea
2019 2.8% 5.7% 3.8% 9.1% 7.2% 2.1% 4.9% 2.7% 5.4% 3.6% 4.1% 3.5% 4.9% 8.5%
2020 2.8% 5.9% 3.6% 9.0% 6.9% 2.2% 4.7% 2.8% 5.5% 3.5% 4.2% 3.5% 4.6% 7.7%
2021 2.6% 5.5% 3.2% 8.1% 5.9% 2.1% 4.1% 2.4% 5.0% 3.2% 3.7% 3.3% 4.2% 7.0%
2022 Forecast 2.8% 5.7% 3.6% 8.7% 6.3% 2.3% 4.5% 2.6% 5.3% 3.5% 3.9% 3.6% 4.4% 7.2%

* Data shown is average merit increase excluding zeroes

Source: Mercer 2021 E3 SMS survey, 2021 Global Compensation Planning report; 28
© 2021 | in association with | All rights reserved. Data for China is for Shanghai
 2022 Merit salary increase
Industry comparison
2021
(2022 Forecast)

MARKET All Industry Chemical Consumer Goods Life Sciences High Tech
AU 2.6% (2.8% ▲) 2.3% (2.8% ▲) 2.6% (2.8% ▲) 2.6% (2.7%▲) 2.9% (3.0% ▲)
CN 5.5% (5.7% ▲) 5.0% (5.7% ▲) 5.3% (5.7% ▲) 5.9% (5.9%) 6.3% (6.3%)
HK 3.2% (3.6% ▲) 3.0% (3.4% ▲) 3.3% (3.7% ▲) 3.7% (3.8% ▲) 3.4% (3.7% ▲)
IN 8.1% (8.7% ▲) 7.1% (8.1% ▲) 8.1% (8.7% ▲) 8.3% (8.6% ▲) 8.6% (9.4% ▲)
ID 5.9% (6.3% ▲) 5.7% (6.7% ▲) 6.0% (6.5% ▲) 6.5% (6.6% ▼) 6.1% (6.6% ▲)
JP 2.1% (2.3% ▲) 1.8% (2.1% ▲) 2.3% (2.3%) 2.0% (2.1% ▲) 2.4% (2.6% ▲)
MY 4.1% (4.5% ▲) 4.3% (4.9% ▲) 4.3% (4.6% ▲) 4.5% (4.6% ▲) 4.4% (4.5% ▲)
NZ 2.4% (2.6% ▲) 2.4% (2.5% ▲) 2.4% (2.6% ▲) 2.5% (2.6% ▲) 2.5% (2.7% ▲)
PH 5.0% (5.3% ▲) 4.7% (5.3% ▲) 5.3% (5.6% ▲) 5.2% (5.2%) 5.3% (5.5% ▲)
SG 3.2% (3.5% ▲) 2.9% (3.4% ▲) 3.4% (3.7% ▲) 3.6% (3.6% ▲) 3.3% (3.8% ▲)
KR 3.7% (3.9% ▲) 3.5% (4.1% ▲) 3.9% (4.1% ▲) 4.0% (4.0%) 4.0% (4.2% ▲)
TW TW 3.3% (3.6% ▲) 2.9% (3.4% ▲) 3.2% (3.5% ▲) 3.6% (3.7% ▲) 3.7% (3.9% ▲)
TH 4.2% (4.4% ▲) 4.6% (4.8% ▲) 4.3% (4.6%▲) 4.4% (4.4% ▲) 4.1% (4.6% ▲)
VN 7.0% (7.5% ▲) 6.6% (7.5% ▲) 6.8% (7.6% ▲) 7.7% (7.4% ▼) 7.2% (7.8% ▲)

Highest value Lowest value * Data shown is average merit increase excluding zeroes Source: Mercer 2021 E3 SMS survey, 29
© 2021 | in association with | All rights reserved. Data for China is for Shanghai
 Promotional salary increase
2019 Actual
Increased since 2020 No change Decreased since 2020
since 2020 2020 Actual/budgeted
2021 Forecast

17.4%
17.0%
16.8%

16.4%
15.7%
15.2%
13.3%

12.7%

12.5%
12.4%
12.3%

12.2%
12.2%

11.9%
11.8%
11.0%
10.5%

10.5%
10.5%
9.9%

9.7%
9.4%
9.2%
8.9%

8.8%

8.6%
8.6%

8.2%
8.1%
8.0%

7.9%
7.8%

7.6%

7.4%

7.2%
6.6%
6.3%
5.4%
5.3%
HK IN PH TH TW MY NZ VN KR ID JP AU SG

30
© 2021 | in association with | All rights reserved. Source: Mercer 2020 TRS survey
 Short-term incentives
In most cases, actual variable bonus was lower than target
Professional - Experienced
Target Actual

14.3%
13.1% 12.8%
11.9% 11.2% 12.0% 11.8% 11.4%
10.6%
9.1% 9.4%
7.7% 8.4% 8.2%
9.9% 15.0% 10.0% 10.0% 13.1% 11.6% 13.1% 9.0% 10.0% 14.0% 11.2% 12.0% 15.0% 13.1%

AU CN HK IN ID JP MY NZ PH SG KR TW TH VN

Management - Manager
Target Actual

15.8% 16.2% 16.2% 16.6%

15.4% 15.5% 14.9% 14.9% 14.5%
13.2% 13.1%
11.4% 12.1%
10.9%

13.9% 16.7% 15.0% 13.7% 16.5% 15.1% 15.4% 12.0% 15.0% 16.3% 15.0% 15.4% 16.7% 15.4%

AU CN HK IN ID JP MY NZ PH SG KR TW TH VN
Note: Actual and target are as % of annual base salary; Data is for the year 2020
31
© 2021 | in association with | All rights reserved. Source: Mercer 2021 Incentives Around the World report;
Data for China is for Shanghai
 Innovative Benefits
What’s New in 2021?
Home office Cash bonuses for
set-up allowances taking vacations

Gym at
your room
Win a “workation” /
Remote rental reimbursement

Planning your
own funeral

Experiential rewards
(e.g. skydiving, wakeboarding classes)
Music to your ears
(e.g. Spotify. Netflix, Disney+
subscriptions) Work from
Emergency
Anywhere
Nanny

32
© 2021 | in association with | All rights reserved.
 Businesses are reinventing
in response to the pandemic
More flexible, sustainable work models and
business practices are the keys to helping
companies address today’s realities and
tomorrow’s challenges
Mercer (Singapore) Pte Ltd (1978 02499E)