Stemming the flow: How Thai companies can retain great employees
MARKET PLACE: HUMAN RESOURCE WATCH
published : 27 Jan 2022 at 14:37
As the pandemic persists, businesses are struggling to retain their best employees. In Thailand, too, some are choosing to leave traditional employment. How can Thai companies reverse the flow of what many people are calling the “Great Attrition?”
Thailand’s economy has been heavily impacted by the pandemic, with waves of COVID-19 causing one of the steepest contractions among Association of Southeast Asian Nations (ASEAN) countries. The pandemic’s health and economic impacts have had wide-ranging impacts on consumption and business sentiments, the job market, and income and poverty levels.
Unemployment has soared to 2.25 percent in the third quarter of 2021, a 16-year high, with around 871,000 people recorded as unemployed. While much of this unemployment can be linked to the pandemic’s scarring effects on jobs and the economy, Thailand is also experiencing a phenomenon known as the “Great Attrition” in certain sectors.
October 2021 statistics from the Thai Department of Employment reflect the main causes of unemployment among persons insured by the Thai Social Security Office to be resignation (66 percent), followed by layoffs (28 percent), and the end of employment contracts (5 percent). While voluntary resignation rates varied across industries and time periods in Thailand last year, it does lead to the question of why some employees are looking to quit in this uncertain job market.
Employees are looking for purpose and belonging
A recent McKinsey global survey of employers and employees in multiple industries in Australia, Canada, Singapore, the UK, and the US might provide some applicable learnings. The survey explores the main causes of why about 40 percent of employees said they were at least somewhat likely to leave their jobs over the next three to six months. Some are leaving jobs before they even have a new one lined up, while others are choosing to withdraw entirely from full-time employment.
The top three factors that employees in the survey cited as their reasons for quitting were that they didn’t feel valued by their organisations (54 percent) or their managers (52 percent) or because they didn’t feel a sense of belonging at work (51 percent).
Adding to the problem, many employers struggled to understand why their employees were leaving. When employers were asked why their people had quit, they cited compensation, work–life balance, and poor physical and emotional health. The issues did matter to workers, but just not as much as employers assumed.
This disconnect is illustrated in the graph below, which shows employers’ and employees’ differential perceptions of attrition factors in the countries surveyed.
How to turn attrition into attraction
As a result, many businesses are struggling to counter this trend, and may be misguided in their response: offering a quick financial fix, such as a pay raise to keep a valued employee on board. But for dissatisfied employees, this approach may be counterproductive. A money offer seems transactional, when workers may be craving something more personal.
It may take a new type of leadership to be sensitive to these nuances. Executives with a strong top-down style to management will benefit from practising being more relational, caring and collaborative with their workforce, and from taking the time to really listen to them. In this time of flux, a restless workforce means opportunity to gain employees, as well as to lose them. Organisations that get this right will have the edge when it comes to finding, and retaining, the most desirable employees. A few strategies that organisations may consider are outlined below.
Focus on the future: Employees in search of a sense of purpose can be motivated by the chance of contributing to the country’s future. Although currently battered, ambitious plans are in play to rebuild the crucial tourism industry, including by promoting sustainable, high-end tourism and the creative economy.
Apprenticing students: There is no shortage of keen young people in the education system; but often, there are obstacles to transitioning them into the workforce. Business leaders could be doing more to ease this transition, by finding creative ways to work with institutions to locate talented students, or by plugging the skills gap with their own training programs and specialised training facilities.
Explore the potential of remote and hybrid work: Many of us have gotten used to working remotely or in hybrid arrangements of remote and in-person—and in fact, these arrangements have often turned out to be preferable, especially for working parents. A return to old ways of working is not guaranteed, even as employers may wish to mandate a move back to the office. Businesses will need to be flexible and make allowances for the workforce’s new expectations and working patterns, and to be sensitive to persistent health and safety concerns with in-person working.
Match employees’ life priorities. Over the pandemic, many reassessed their life priorities, with values like family care becoming more important than ever. In McKinsey’s global survey, 45 percent of respondents who had left jobs cited the need to take care of family as an important element in their decision to leave.
Businesses that align with these sentiments will likely fare better than their counterparts who do not. Employees will be looking for family-oriented benefits like on-site childcare or improved nursing services, workplace flexibility, wellness programs, and other signs that their employer acknowledges their lives beyond the office. They will also require reassurance that their careers have a meaningful trajectory, and that there will be room for them to advance and develop. It will be vital for employers to recognise employees’ contributions—whether by promotion, or by finding ways to reward achievement within their current roles.
Support women in the workplace: Women, in particular, make up an often underappreciated part of the workforce, and have borne the brunt of COVID-19 disruptions to the home and working life. Although Thailand compares quite well when it comes to gender equity in senior roles—24 percent of CEOs and managing directors are women, while the average is 13 percent in the Asia-Pacific—there is much that businesses can do to make women feel more supported. For example, building on progress made in 2020, the heads of 110 Thai companies committed to a new set of women’s economic-empowerment principles established by the United Nations: pledging investment in women’s professional growth, equal pay for equal work, and safer and more inclusive workplaces, while improving the measurement and reporting of gender equality.
Thai companies, like businesses all over the world, are feeling the pressures of the “Great Attrition” – and these are unlikely to ease in the near-term. However, for companies that are prepared to challenge old ways of working, reimagine leadership, and listen to employees’ needs, this trend represents an opportunity to gain, and keep, great employees, even as others lose them.
Authors: Noppamas (Yam) Sivakriskul is McKinsey & Company’s senior partner and managing partner for Thailand, where Liesje Meijknecht is a partner. For further information please contact Alan Laichareonsup at email: Alan_Laichareonsup@mckinsey.com
Series Editor: Christopher F. Bruton, Executive Director, Dataconsult Ltd, firstname.lastname@example.org Dataconsult’s Thailand Regional Forum at Sasin provides seminars and extensive documentation to update business on future trends in Thailand and in the Mekong Region.