The COVID-19 pandemic is driving a fundamental shift in the way companies operate, accelerating the need for an adaptable and agile workforce to bolster business success. According to Mercer’s 2021 Global Talent Trends study, the financial impact and work-life disruption caused by the pandemic has spurred employers in Southeast Asia (Indonesia, Thailand, Malaysia and the Philippines) to focus on defining future workforce needs by restructuring (48%) and active reskilling in 2021 (39%) to future ready their business and workforce.
Also high on their priority list is reinventing their business sustainably (32%), as companies expand their view on an organization’s responsibilities to communities, extending success metrics beyond shareholders and making sure the interests of consumers, employees, and the environment are maximized as well.
Defining future workforce needs and upskilling for business success
The nature of disruption today demands that companies transform at pace to stay ahead of competition, and according to Mercer’s survey, nearly half of the employers in Southeast Asia are assessing longer-term organizational structures and workforce needs in 2021. Empathizing and delivering on the needs of a broader range of stakeholders – particularly employees, was a key trend that emerged in 2020 – and is likely to persist. 82% of companies in Southeast Asia, compared to 65% of their global peers, are reexamining what benefits are most relevant to different employee persona groups, though more can be done to support employee’s financial education – with just 27% planning to offer more this year. To free HR leaders up to focus on areas where they can add the most value, companies are looking outsource non-core activities such as pensions and benefits expertise and well-being strategy support.
COVID-19 also proved how rapidly adjusting capacity and redeploying resources is critical to success. 45% of companies made it easier to share talent internally as a result of COVID-19, and a further 27% plan to do so in 2021. As remote working becomes mainstream and new ways of working demand new skills, companies are seeking to focus on targeted workforce upskilling of critical talent pools (63%); reinvent flexibility for their workforce (59%), and expand their talent and learning eco-system (48%).
While 63% (compared with 53% globally) of firms are identifying new skills needed for their post-COVID operations, just 11% of HR leaders, (compared to 14% of their global peers) are planning to move to pay-for-skills structures or reward skill acquisition.
Piratat Srisajalerdvaja, Mercer’s Career Product Business Leader for Thailand said, “Majority of companies in Southeast Asia are transforming their organization with a priority to reskill or upskill their employees as it becomes more critical for future. Moreover, transformation during COVID-19 pandemic is more challenging as the company needs to have a clear view of the required skills during the pandemic (e.g. collaboration for virtual working and adaptability) as well as skills post-COVID, which may be different.”
Leading for the Long Term
The COVID-19 pandemic has challenged organizations to consider a broader set of interests beyond that of shareholders and to reexamine their responsibilities to their stakeholders, which includes its employees. Despite the financial impact of the pandemic, many employers stepped up in 2020 to protect jobs and where possible, incomes – a departure from previous downtowns. 63% of Southeast Asia HR leaders reported that their company has continued or stepped up the pace towards an ESG and multi-stakeholder business approach, with 32% saying they will invest responsibly.
In considering how to better support their employees with new ways of working and at different life stages, nearly half of companies are planning to improve analytics in psychological, mental and emotional well-being, significantly more than the global average of 31%. However, only 9% of Southeast Asian companies are looking into investing in diversity, equity and inclusion (DE&I) analytics and insights, compared to 23% of their global peers.
The report also revealed that companies in Southeast Asia are lagging when it comes to meeting the needs of older, experienced workers via flexible career pathways. 66% of Southeast Asian companies do not use or plan to look into investing in analytics to predict when older workers with critical skills are likely to retire. Only 9% allow for phased retirement.
Godelieve Van Dooren, Mercer’s South East Asia Growth Markets Leader & Asia Zone Career Business Leader said, “With rising life expectancy and the raising of retirement ages in Asia, companies need to do more to support older workers with arrangements that suit their life stage. Companies who do not explore ways of retaining this vital cohort of workers are at risk of losing valuable skills and knowledge that should be passed down to younger employees.”
Other findings Mercer’s Global Talent Trends Survey:
- Healthy people equals healthy business. More than half (55%) of Southeast Asia firms plan to offer increased access to remote health and benefits compared to only 36% of their global peers.
- HR leaders plan to improve their analytics capabilities to support learning and skill acquisition (57%); strategic workforce planning (53%); and performance data related to flexible working (52%)
- HR leaders say the top barriers to transformation are balancing an emphasis on survival/lack of budgets (57%); employee exhaustion given the blending of home and work (48%) and too many distracting priorities (39%).
About Global Talent Trends study
The sixth edition of Mercer’s Global Talent Trends (2021) study shares insights from over 7,300 senior business executives, HR leaders and employees and, for the first time, has deep dive Companion Reports for 23 geographies, spanning 44 countries. To download the Global report, visit here. In conjunction, the Global Talent Trends 2020–2021 Local Companion Report – Southeast Asia edition shares insights from 200 Southeast Asia HR leaders to uncover their priorities for the year ahead. To download the Southeast Asia edition, visit here.