Rewards strategies for Malaysia's workforce: 6 key takeaways in 2023

"Allow some personalisation in your total rewards strategy. Personalisation should be possible – even while being fair to everyone," one leader shared. Event report by Priya Sunil, with inputs by Aditi Sharma Kalra.

Total Rewards Asia Summit returned to Malaysia in its ninth edition this year, on 12 and 13 July 2023. 

Over the span of the two days, more than 140 CHROs, compensation & benefits (C&B), and total rewards leaders gathered at Le Méridien Petaling Jaya to uncover solutions for retaining employees in a highly competitive labour market, while also keeping them engaged and productive.

This article will focus on learnings and insights derived from some of the many case studies, fireside chats, keynotes, panel discussions, and a micro-workshop, spread over the two days.

Understanding the reasons behind the Employment Act amendments

As a recap, effective 1 January 2023, the amendments:

• Widen the scope of coverage – covers every single employee.
• Reduce maximum work hours
• Increase paid maternity leave
• Introduce paid paternity leave
• Include flexible working arrangements
• Cover employment discrimination disputes
• Include sexual harassment awareness
• Impose heavier penalties for violation

"Do we truly comprehend the Amendments and how they impact employee perks, flexible work, and family-friendly policies”, our speaker asked, as he reminds C&B practitioners to unlearn and relearn the principles behind the changes to the Employment Act. "You should be able to understand the implication of complying, or partially complying with the law, on your business and your employees."

Delving into this, he highlighted the Government's aim to keep up with progress in the current employment landscape by making these changes. He also pointed out the common assumption that these changes are simply about increasing the coverage of earners, noting that this was not true; instead, the expansion was to include coverage for every employee, regardless of salary.

On that note, while the amendments mean an increase in total labour costs, they do benefit more people; comply with international standards; legislate what used to be 'extra perks', and allow flexibility at work.

How then, can leaders leverage a more appealing C&B programme from these changes? According to our speaker, C&B teams should consider including these questions in their discussion with their leadership:

1. Is this a right time? Do we just want to follow the bare minimum requirement or do we want to do more?
2. Why is change necessary? Look at how the change will help your company to be more competitive.
3. Do others also engage in it? How are others evolving, or are they seeing the wait-and-see game?
4. Can we turn this into an opportunity?

In essence, he affirmed:

• Focus on rewarding performance based on deliverables – not on the basis of who is in the office at 8am in the morning.
• Allow some personalisation in total rewards. Personalisation should be possible – even while being fair to everyone.
• Find the purpose in developing your total rewards. Think about: performance, retention, engagement. A lot of us use benchmarking, but there are ways for you to deviate from bechmarking based on your talent needs.

Finding the missing piece in wellbeing: Measurement 

Give your employees the tools they need for better mental health support – and not just those who already need resources; rather, give these tools to the majority who don't "need" these resources, so they can continue to build good habits and be engaged. "You would want to have something in place for everyone, no matter what point they are at or phase they are in," this speaker stressed. Additionally, ensure that your employee assistance programme is integrated in a way that employees have access to it at their convenience.

To then keep track of the programme, she shared four key steps: the first being to assess the situation, followed by deploying the right tool, then embedding the conversation – wherein executives shape the culture; middle managers activate and sustain behaviours, and the workforce educates on and normalises mental health.

The fourth, and often overlooked step, is measurement. Measuring the outcome, namely through:

• Trends derived from employees' actions and behaviours
• Utilisation rate of your programme
• The clinical outcome: yes, your employees are engaging in the tool & programme, but are their stress levels improving?

In that vein, she highlighted the need to create a culture that encourages dialogue, while also destigmatising discussion around mental health & wellbeing:

• Macro approach: Start from the top and cascade down. Similar to how company KPIs are set, wellbeing goals are the same, i.e., a top-down approach so the conversation is destigmatised at the top.
• Macro approach: A top-down approach is not enough. You also want to reinforce it horizontally, with all the micro-discussions. For example, have drop-ins, and have a group of culture bearers at all levels of the organisations (voluntary, if possible).

Remember, flex plans are not the only reason your people would stay 

One of the biggest takeaways derived from a conversation on flexi-benefits and customisable perks was: People don’t stay because of the flex plans you offer them – it is never the main factor. They stay for the culture.

The biggest benefit, however, is that flex plans are customisable and can suit various employees’ needs and lifestyles. The disadvantage is the cost. As much as you may want to design a cost-neutral plan, cost remains the highest barrier to flex plans implementation. Not only the cost to implement, but the cost of education and management buy-in as well.

The age-old debate: To have pay transparency, or not?

It's a conversation starter, but it's also a topic for heated discussions (which were, of course, amicable in our panel!). Among the many pros and cons laid out, our panellists discussed the following:

• Pay transparency allows leaders to benchmark and rate talent across the markets – especially in times of a talent shortage. It allows for transferrable talent across the board. Risk-wise, talent might be deviated in different regions based on cost-of-living and other factors.  
• While there are benefits to adopting this approach, it is imperative to understand that if not implemented correctly, it brings challenges – counterproductivity, more “damage” than benefits in certain aspects.
• It is a good thing, one panellist noted, but it needs to be thought through. Thus, the need to focus more on building the ecosystem, communication, leadership coaching, coaching, and more, together and not in isolation.

To start on the pay transparency journey, begin with your managers first. They need to know how much their department costs. That creates transparency in hiring better and retaining talent in different departments.

Essentially, the maturity level needs to be there in your leadership.

How organisations can address disparity in pay:

• Use of analytics
• Ensure it is not a one-time affair, and that it connects to your reward philosophy. Conduct internal parity on a regular basis.
• Yes, pay transparency is in fashion, but it has to be supported by the numbers.
• It’s not a race, it’s a marathon, and has to be part of culture-building.
• Look at ownership of communication to your team members and employees, on why they are being paid x amount and someone else is being paid x amount. If you are honest and open about that, it allows you to justify better. From HR's point-of-view, it also allows a conversation and the opportunity for them to know the benchmarks to make it to a certain level in the organisation. Ensure a common understanding.
• Share the how – involve stakeholders
• Share the what – benchmarking exercises
• Share the when – when a change will happen; communicate, communicate, communicate.

How to manage "ungrateful" employees – a popular question raised by the attendees: Get them to look at it from an organisational standpoint – talk about the business, not just them as employees.

How HR can support managers in implementing such a system

• Prepare managers to handle crucial conversations, supported by data. Don’t just talk about quantity (number of years with the organisation); talk about quality too (skills sets achieved in the tenure, etc).
• Be authentic and real.

Finally, where do our panellists see the debate on pay transparency heading in the future?

In essence, it’s about readiness and the maturity of the business. It's also important that such an approach is a sustainable intervention. 

"It has a future, but you need to look at how your industry peer group is doing it. You don’t want to just stand out. Have conversations with peers from different industries," one panellist advised.

Providing an ideal retirement plan for your workforce

For quick takeaways, coming to a discussion on this topic, all panellists agreed on the importance of the following considerations in retirement planning from an employer’s perspective:

• Changing youngsters' mindsets on planning for retirement amidst rising costs-of-living, expensive loan decisions, and financial stress,
• Creating financial literacy for the workforce, in order for them to make better savings & investment decisions, and
• Keeping in mind business objectives in drafting a policy – apart from conducting a cost-benefit analysis, what’s needed is highlighting the 'why': are we trying to hire talent, are we trying to cut costs, or are we trying to retain specific talent?

Keeping total rewards ‘in trend’ for a hybrid workforce

One key sharing that stood out here was that, when it comes to flexible work arrangement policies, give empowerment to your leaders – let them take the decision on these policies for their team, as long as they are able to balance productivity with the flexibility provided to employees. 

Additionally, when looking at hybrid benefits – as HR, the major concern when incorporating benefits is the cost impact. To tackle this, one panellist advised to do an analysis of all benefits being offered. For those that have low utilisation, convert the benefit into something else that supports the hybrid benefits model.

There is also a need to convince stakeholders that these new benefits have little impact to costs. Having in place flexible benefits does not have to be about increasing your investment in the people, but more about being creative – where to add more and where to remove more.

How to get stakeholders engaged in such programmes:

• Be transparent in communication
• Be predictive – especially to employees, in terms of letting them know what they can anticipate/be receiving at the end of the day.
• In essence, communicate the expectations of top management and how the gap is being addressed; as well as what feedback employees shared and how this feedback is being acted on. When you are transparent and predictive, you are motivating them to be engaged.

Apart from these, it is also important to connect your strategy to your business goals – so it translates into more than just a reduction in attrition rate.

Measuring success:

When it comes to measuring the success of your programmes, what's key to note is that it is not about what other companies are doing in the industry, rather, it’s about what’s out there in the market and how you are taking certain steps and actions to meet market demands. In other words, contextualising data to your organisation, and not just focusing on being competitive, our panellists highlighted.

• Are you able to motivate your internal stakeholders?
• Are you able to retain employees?
• Look at the bigger picture – maintaining internal equity (pay structure, pay band, etc), to see if you are in trend.
• Does this total rewards package help employees feel more engaged and productive? Is there a direct correlation between this and the company’s revenue?

Human Resources Online would like to give our heartfelt gratitude to all speakers, panellists, moderators, and micro-workshop facilitator for lending us their time and expertise towards the success of this two-day platform.

We would also like to thank our sponsors and partners for their limitless support:

Gold Sponsors 

• AIA 
• Paywatch 
• ThoughtFull 

Silver Sponsors 

• Grab For Business
• O.C. TANNER
• Telus Health 

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