How Much Should You Be Paying?
Building a resilient workforce
Written by Jodi Walters, this article first appeared in HRD Asia on 08 Dec 2022
There’s a perfect storm brewing for employers in the Asia Pacific (APAC) region right now. High inflation has businesses wanting to tighten their belts, but a tight talent market is forcing increased salaries. So, how can employers be sure they are offering salaries in the right range?
“There’s a couple of things causing tough times for employers right now,” explains Belinda Armenta, a partner in Aon’s human capital solutions practice. “Asia Pacific is a diverse region, facing a wide range of economic conditions. Throughout 2022, parts of the region experienced record levels of inflation and cost of living rises. When you couple this with the significant supply and demand pressures for talent, it means employers are finding more specialised roles becoming harder to fill and are needing to pay premiums both for key skills and securing talent.
So, the big conundrum for every employer as they start thinking about the annual remuneration review is, what is the right number? “Employees want to see a meaningful number that counters the cost-of-living crisis, but organisations need to be deliberate about their cost structures, so they’re being careful with their compensation budgets,” says Belinda. “In these complex times when considering how much to pay people, employers need to base decisions on very robust data.”
The trouble for some businesses, however, can be lack of data, which makes it almost impossible to make informed decisions. At a recent webinar held by Aon, attendees voted ‘not enough data’ as one of the main challenges facing them as they approach the remuneration review season, the issue being especially prevalent in APACs emerging markets.
Aon’s human capital solutions practice operates comprehensive databases that track and report on employee pay across the globe. Aon’s Radford Global Compensation Database contains data for 6,500 companies across 102 countries in a wide range of industries and professions, including technology, sales, manufacturing, life sciences and more.
Aon’s databases comprehensively cover the full range of compensation elements in an employee’s package and are regularly used by companies to ensure they pay their employees market competitive rates. Employers can use the data and online tools provided to learn what similar jobs are paying, so they can be more competitive by understanding where they sit compared to the rest of the market.
The data is updated quarterly, something Armenta says is key. “The pace of change is increasing and we’re in a less predictable environment now, and there is a real need for more frequent data. We’ve worked hard to bring that information to the market in a very dynamic manner.”
Something that makes Aon’s dataset stand out is the length of time it’s been compiled over. “Our database has been operating for over 40 years and one of the keys to data and data insights is analysing trends and movements over time,” explains Armenta. “That’s something Aon’s people have a great deal of practice in and they’re more than happy to help employers break down and leverage the data, so they can be sure their remuneration packages are attractive.”
“We take our clients on a journey in terms of helping them understand the data and how to apply it,” says Armenta.
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