Performance continues to drive pay-related decisions for 95.1% of employers in Thailand, reveals the Total Compensation Measurement (TCM) Study and Benefit Survey 2016 conducted by Aon Hewitt.
An alarming discovery is that both voluntary and involuntary turnover rates are highest among junior managers and supervisors, across all industries in Thailand. This reflects the mounting pressure on these employees to sustain their performance levels, even as they make the significant leap from individual contributors to their first managerial roles.
While the average rate of variable pay (or bonus payout) versus fixed pay is set at 18% for both individual contributor and management level, the increase in performance expectations could impact the variable pay component for junior managers struggling with the transition.
“The high turnover rate among junior managers should warn employers in Thailand to think about their compensation policies in the context of their overall talent retention strategy,” says Panuwat Benrohman, Partner APAC MEA, Managing Director, Aon Hewitt, Thailand.
“While the pay for performance model has its merits, employers must also embrace their responsibility to equip junior managers as they transition from individual contributor roles.
“With 'better external opportunities' and 'limited growth opportunity' among the top three reasons for attrition, a focus on learning and development will help employers in Thailand build a strong leadership pipeline from within while still compensating high performers attractively."
The study also reveals that the average bonus rate stands at 22% of the annual base salary in 2016, compared to 17.62% in 2015.
Retail and life sciences offer 6% salary increase in 2016, the highest across all industries. Travel industry has the lowest salary increase, at just 4.7%.
The rate of variable pay ranges from 15% at support level to 18% at individual contributor and management level, and 20% at executive level.
A majority or 72.2% of employers offer individual performance awards while 38.9% offer special recognition as short-term incentives to retain employees. Less than half (43%) of organizations provide financial wellness advisory as a benefit to employees at all levels.
Employers invest an average of 11% of annual base salaries on employee benefits, with medical outpatient costs making up a significant portion.