Empowering talent: Innovating with skilled-based compensation

As the world grows increasingly connected, people are enjoying greater travel freedom than ever before. For Singapore citizens, this travel freedom is even more pronounced, considering how the Singapore passport has been ranked the most powerful passport in the world.

According to the 2024 Henley Passport Index, the Singapore passport, in granting its citizens visa-free access to 195 countries, is indisputably the most powerful passport in the world. Now, imagine an equally powerful skills passport that can not only support lifelong learning but also help to map out the next development steps on an employee’s career journey.

“At GlobalFoundries (GF), we view an employees’ skills passport as a living document that tracks specific skills acquired, their proficiency levels, and how these align with various job roles and career paths within the organisation,” Janice Lee, Vice-President of Human Resources for APAC, GlobalFoundries, told HRM Asia.

“More importantly, it maps out associated pathways of development to help employees reach the ideal mastery for key skills.”

This approach to talent management, she added, is critical as it enables employees and their managers to regularly access and update these skills. In the long term, this drives continuous upskilling, reskilling, and cross-skilling for employees in areas that are not only relevant to their roles but also align with their career aspirations.

“By continuously developing new skills, employees can explore expanded or new roles with evolving positions and career paths, making them more adaptable and valuable to the company,” Lee added.

As a multinational semiconductor manufacturing company, GF is constantly reminded of the importance of developing new skills, as rapid technological advancements in the manufacturing sector demands a workforce that can adapt to new tools, processes, and innovations.

To allow their employees to adapt and thrive, GF adopts a holistic talent development framework that prioritises both technical and soft skills. “This helps our employees remain competitive and builds the resiliency of our organisation in a fast-moving industry,” Lee explained.

Maximising talent: Why skills-based compensation is gaining momentum

In an emerging skills economy, more employees are recognising the importance of upskilling to keep themselves relevant.

According to a survey conducted by Indeed, over two-thirds of employees in Singapore looked to upskill themselves in 2024. This is in response to the demands of a changing job market and also aligns with the Singapore government’s focus on skills development and lifelong learning.

“With both government and workers driving this shift, companies must follow suit or risk losing talent to organisations that offer the upskilling opportunities employees now seek,” Lee suggested. “As employers, we must proactively respond to the evolving needs and expectations of the workforce to attract and retain top talent.”

At GF, the priority lies in investing in employees’ development throughout their career journey and ensuring that everyone has a clear pathway for advancement within the organisation.

“To implement a skills-based compensation model sustainably, companies will need to redefine their performance management process to better align individual performance to organisational successes.” – Janice Lee, Vice-President of Human Resources for APAC, GlobalFoundries

Lee continued, “Building and sustaining a strong talent pipeline through workforce transformation is key to GF’s long-term growth, especially in an industry that relies on skilled talent to drive innovation.”

With this focus on skills, GF, like many companies, is also pivoting to a more skills-based compensation approach, which rewards employees based on their individual skill sets and competencies.

There are, however, inherent challenges in implementing skills-based compensation models in an equitable and sustainable way, as Lee acknowledged, “To implement a skills-based compensation model sustainably, companies will need to redefine their performance management process to better align individual performance to organisational successes.”

“This has benefits on two levels: first, employees have access to the developmental opportunities they need to reach personal and professional growth goals. What generally comes with it is also a total rewards package that is market competitive and pegged to the individual’s performance.”

To ensure that a skills-based compensation model is straightforward in application, she recommended the implementation of quantifiable performance indicators. These should complement a holistic framework that includes qualitative attributes like collaboration, communications, team impact, and influential team leadership, to allow companies to arrive at fair and equitable compensation.

Striving to be a fair and equitable employer of choice, GF employs an Objectives and Key Results (OKR) model that harmonises individual and organisational objectives through a transparent and collaborative approach.

Lee explained, “With this model, we recognise and reward our employees according to their achievements of OKRs, taking into consideration ancillary outcomes like collaboration, communication and leadership. Essentially, it highlights a symbiotic relationship where the success of the company directly contributes to the development and advancement of its employees, and vice versa.”

“We also take active steps to ensure our employees are fairly compensated through regular performance reviews, industry salary benchmarking exercises and other initiatives. “

People-centric approach to compensation and benefits in 2025

With employers in Singapore needing to fairly consider requests from employees on flexible work arrangements (FWAs) from December 1 onwards, a constant review of compensation and benefits that factor in overall employee wellbeing and expectations for greater work-life harmony must be considered, Lee said.

“This is especially important for working mothers, who often balance family responsibilities with career aspirations. Whether that involves relooking at maternity leave policies or implementing initiatives like women support groups and lactation rooms for new mothers, employers will need to invest meaningfully to demonstrate their commitment to overall employee wellbeing.”

Demonstrating its commitment to supporting female employees, GF is offering 20 weeks of paid maternity leave, regardless of the employee’s nationality. The company is also reviewing its policies to be In line with the Singapore government’s initiative to provide four weeks of paid paternity leave for eligible fathers from April 2025, Lee revealed.

READ MORE: Rethinking talent and compensation in a shifting economic landscape

She added, “Our wellness programme, GF Cares, provided employees with access to the Naluri app, which offers on-the-go resources to support wellbeing like individual coaching, psychological support, and wellness workshops that focus on building healthy habits, financial literacy, and yoga,”

These efforts clearly demonstrate that, while companies continue to strive for compensation structures that align with industry standards, performance, and organisational goals, one key goal in 2025 would be to tailor compensation and benefits to meet the specific needs of an increasingly diverse workforce.