15 March 2008

An employer's dilemma?

The question of “can we work anywhere we please so long as we get the work done” is pertinent for instituting a work-life balance policy in an organization. Are flexible working arrangements and unstructured work environments crucial for recruiting and retaining talented people? A recent report suggests that "shoo-ing workaholics out of office" may be the answer for a Singaporean mid sized law firm.


http://www.todayonline.com/pdf_main.asp?pubdate=20080314

In Singapore,
the year 2007 ended with “money” talk. With an extremely competitive labour market, cash and more cash were thrown at people, particularly talented people to attract, and retain them. While this “old school” approach appears effective until greed consumes some of them, practitioners are focusing on non-cash compensation to engage talented employees to “keep you in business”.

It has been reported that organizations are pursuing non-cash compensation solutions. About 53 per cent of the organizations in a survey offer opportunities for continuous learning. Others cite improving work-life balance (49 per cent), improving staff engagement (31 per cent) and faster promotion (30 per cent).


Before we rush into creating innovative non-cash compensation solutions to attract and retain talented local and foreign people, it is important to realize that non-cash compensation solutions may be workable only if salaries are attractive and competitive.


From employees' perspective, cash compensation is normally not swappable with non-cash compensation. While we attempt to carve out current cash compensation to fund non-cash compensation items, employees perceive intangible benefits as entitlement. Carving out cash compensation to fund additional employee benefits are often perceived as a reduction in salary.

Should additional benefits to be introduced in organizations be carved out of their current compensation? Cognitively possible, but emotionally difficult to implement.



http://www.todayonline.com/pdf_main.asp?pubdate=20080315

Perhaps, the dilemma for employers is the spiraling wage costs. "Will spiraling wage costs scare away business?" An economist with the Singaporean UOB Bank did not think it will. Other advantages, according to the UOB economist, such as "a high quality of manpower, transparency and efficiency, and good infrastructure are what continues to attract businesses here.”

We assumed a causation between productivity and wages ; if productivity leads wages, there is no real cause for concern. But then, the concept of "productivity" is continually abused by government agencies to justify for spiraling wage costs, and increases in the cost of conducting business. Regardless, spiraling wage costs is still a cause for concern even if productivity leads wages.

An employer's dilemma is not so much as to offer innovative employee benefits to attract and retain talented people. What is most pertinent is the costs of providing for intangible benefits.

Human resource management practitioners may not be comfortable with the mathematics of actuarial science, financial modeling and life-choice simulations. Hence, the cost of non-tangible benefits may not be computed and thus, unaccounted for. We may be in for a rude shock if we compute the total costs of providing non-cash compensation to employees.

Where benefits are offered to employees, it may be difficult to swap them for other benefit items, or withdrawn from employees when dated. This is the main reason why organizations continue to "grand-fathering" dated benefits that were once offered to employees.

The dilemma of employers is the unseen costs of providing non-cash compensation to employees, talented or otherwise.

05 March 2008

Never mind the rising rentals, really?


http://www.todayonline.com/articles/241170.asp