Employers in Asia fall behind in offering flexible work options despite employee expectations: Mercer Global Talent Trends Study 2023 

• HR leaders in Asia focus on improving employee experience amidst tight labor market
• Asia ahead of global peers in upskilling workforce and identifying talent development needs 

Despite economic headwinds, nearly six in 10 executives¹ globally expect their firms to post stable or high growth. But in Asia, business optimism is tempered by talent challenges with 54% saying they will struggle to meet demand with current talent models, due to high staff turnover, increase in quiet quitting, and difficulty hiring the right talent at the right price quickly enough.

Mercer’s Global Talent Trends (GTT) Study 2023, which includes a pulse survey with close to 2,500 HR leaders globally, echoes similar sentiments as a tight labor market continues to make talent attraction and retention a pressing priority. To address the talent challenge, more than 1,020 HR leaders surveyed in Asia are looking to improve the employee experience for key talent (58%), rethink compensation philosophy and implement new practices (54%), and improve workforce planning (53%) this year.

The GTT uncovers the ways organizations are redesigning work and the workplace, especially in light of sociopolitical and economic changes, and identifies talent-related trends to enable organizations to thrive in the future of work. Key findings of this year’s survey include the need for employers in Asia to double down on offering work flexibility, focus on employees’ holistic well-being, and future-proof their organizations by creating skills instead of jobs.

Only half of employers in Asia say they offer flexible work options for all employees, which is lower than the global average of 56%. Close to 30% do not plan on offering flexibility to all employees in the future. This falls below employees’ expectations, considering that nearly seven in 10 employees said last year² that not being able to work remotely or hybrid permanently is a deal breaker when considering whether to join or stay with an organization.

To combat the impact of inflation, employers in Asia are on par with their global peers in using bonuses or implementing pay adjustments to increase employees’ total compensation package. However, Asia (22%) fell below the global average (29%) in providing a cost-of-living adjustment or other wage increases for the most impacted markets which is a more sustainable way of managing compensation for organizations.

To attract and retain talent, organizations need to differentiate themselves beyond having fair pay policies, and also prioritize employee well-being, which encompasses physical, mental, social and financial well-being. While 40% of employers have made progress with initiatives to destigmatize mental health and encourage self-care (compared to 34% last year who planned to introduce a well-being strategy), the region continues to lag in areas like providing on-demand access to virtual mental healthcare (26% versus a global average of 32%). Only 14% (versus a global average of 21%) have invested in financial wellness programs that boost long-term financial security for their employees, especially the older populations.

The pandemic has underscored the importance of a skills-based talent model and agile work design in building the workforce of the future. While employers in Asia outperform their global counterparts at safeguarding the future employability of its workforce through training (60% versus a global average of 59%) and understanding talent development needs (56% versus a global average of 53%), they lag in leveraging tools and technology such as AI to assess existing skills and identify skills gaps. In line with their global peers, less than 5% of HR leaders consider themselves advanced on this journey.

Puneet Swani, Mercer’s Senior Partner and Career Leader for Asia, IMEA and Pacific, said, “The talent challenges organizations face today boil down in large part to a disconnect between what employers offer and what employees expect. Remote working, which is now an expectation, is a good example. There is no silver bullet when it comes to flexible work arrangements. Apart from weighing the pros and cons, organizations need to clearly communicate the reasons behind their return-to-work policies.

“When adapting to the future of work, it is also critical for leaders to build a skills-based talent strategy. They could start by breaking down jobs into tasks or activities, and have a clear understanding of what skills are required to perform those tasks effectively.”

¹  Mercer 2023 Executive Outlook survey
² Mercer Global Talent Trends Study 2022