2020 Payroll and HR Trends in Asia

What areas should your organisation look out for this year in terms of Payroll and HR Trends in Asia?
By: | March 10, 2020

By Inna Wahlberg, General Manager of Asia Services at Ascender

Organisations are constantly dealing with change. Especially across Asia, conducting business can be a little more complicated sometimes, due to the richness of and variety in cultural and social norms, economic systems, business practices and governmental focus areas. Unlike in Europe where standardisation is the goal between countries, Asia Pacific will remain diverse and different for the foreseeable future, but that makes doing business here far more interesting!

Inna Wahlberg is the General Manager of Asia Services at Ascender.

This year, we can expect to see a similar pace of regulatory and technical change as we have grown accustomed to in previous years, but we also expect to see a heightened focus on employee wellness and engagement as an emerging trend in the region. The continuously evolving regulatory landscape will keep compliance on the forefront businesses in this region as well.

To help organisations prepare for upcoming changes, we will shed some light on what to expect in 2020, and why.

Enforcing accurate, timely pay

Employees care deeply about their pay. This is fundamental. Getting pay right has still proven quite difficult for organisations to achieve. We also see an emerging interest in pay equity across the region. Employees are starting to pay more attention to the notion of equal pay for equal work, and they are becoming more open to talking about this in the workplace.

To accomplish pay transparency, HR and payroll managers first need to establish trust. In a ‘gig economy’ with a more contingent workforce consisting increasingly of part-time or freelance team members, each compensation package is unique, which means clear communication about the set-up of the total compensation package is critical.

Given the transformation in the way we work, legislators will also watch this space closely, applying more scrutiny and stricter legislation to affected industries in an effort to protect the workforce from adverse effects, such as wage theft. While more precise practices can add complexity to payroll, compliance will ultimately help build employee confidence and enhance the organisation’s reputation.

The importance of employee wellness

Employee Health and Safety has been a key focus area in many organisations for a number of years. However, in 2020, we are seeing a subtle but important shift towards focus on Employee Wellness. Wellness as a trend encompasses both physical but also mental wellbeing and employees are starting to think more holistically about what this means for their workforce.

We now experience a growing emphasis on agile working across Asia. According to results from Randstad Workmonitor, 87% of Singaporeans said that having the autonomy to work at an offsite location increases their productivity, creativity, and job satisfaction. Similar trends can be seen in other Asian countries too. This puts more pressure on employers to provide better facilities in support of such ways of working, and focus on personal health and flexible work arrangements. We also see many companies are already embracing the trend by incorporating more meaningful perks and employee benefits to their portfolio.

Last year, Microsoft in Japan implemented a four-day work week initiative, which, according to the company, led to a 40% boost in productivity. With global organisations leading the way with such policies, these discussions are poised to have a broader impact for businesses.

Impact of legislation

In 2020 we expect the volume of statutory and legislative changes across Asia to continue to gradually increase, as the drive for increasing transparency for employees with regards to payroll and HR policies grows, which in turn will add complexity to businesses operating in the region. Additionally, diverse local statutes are supplemented by additional cross-border regulation such as most notably the EU’s GDPR, which will have an impact on how companies operate in the region.

A sampling of key legislative changes that have already taken effect include Singapore, where the Central Provident Fund (CPF) contributions for workers over 55 years of age will steadily increase each year to a new maximum level in 2030. In China, the government recently completed a significant overhaul of the income tax system introducing more complexity in payroll management locally. In Malaysia, when the Minimum Wages Order 2020 comes into effect, two different sets of minimum wage rates will start to apply.

We expect similar changes to continue to occur in 2020 and beyond.

What does this mean for organisations in APAC in 2020?

In 2020, organisations operating in APAC must increasingly start to shift their attention from merely managing the complex and continuously evolving regulatory landscape into topics like employee wellbeing and engagement. Engaged employees are likely to be much more productive and loyal. This is important because there is a clear linkage between a happy team and improved client satisfaction. Happy employees provide great service, and that in turn boosts the company’s bottom line.

Regardless of where your business is based, it is imperative to remain compliant both from legal, social, and individual perspectives. Those who can adapt quickly will thrive in this market over time.



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