Bridging the Compensation Gap: How Tailored Benchmarking Solved a Multinational's Talent Woes
A Singapore-based oil company needed help in aligning its compensation and benefits with the competitive Singapore market.
Client Background:
Our client, an integrated oil company with a workforce of approximately 50 employees in Singapore, sought our expertise to address critical challenges in talent management. As a subsidiary of a larger Chinese corporation, they were struggling to align their compensation and benefits packages with the competitive Singapore market.
Challenges:
The compensation and benefits structure of the client’s Singapore office was derived from their Global HQ in China, without adjustments for the local market. This led to issues with attracting and retaining talent, making the company less competitive as an employer of choice. The client engaged our services to understand their standing against the market and to identify the root causes of their talent challenges.
Our Approach & Detailed Analysis:
We conducted a comprehensive survey of competitors, including companies of similar size, business activities, top-tier firms, and those the client aimed to hire from. The analysis revealed key discrepancies between the client's compensation packages and local market norms.
Base Salary
While the client’s base salary was competitive, benefits did not align with local expectations, causing challenges during talent acquisition
Annual Wage Supplement (AWS)
We found that 80% of competitors offered AWS. In fact, 35% of competitors were providing 2-3 months’ worth of AWS. This data helped us convince the client’s management to implement AWS, as it was a common practice in Singapore.
Days of Leave
The client offered 14 days of leave for all employees. This fell short compared to competitors, who offered an average of 19.5 days of leave. In the industry, 7 days of leave is considered too little, and 14 days is the lowest. Competitors who offered 14 days of leave upon employment typically provided an increment on days of leave per year of service, up to 18 to 21 days of leave. Competitors who offered more than 14 days of leave were also seen to provide additional leave based on seniority.
Insurance Coverage:
The client initially provided minimal health coverage for employees. Our survey showed that 90% of competitors covered both employees and dependents, with comprehensive plans including GP outpatient, accident, hospitalisation, and life insurance. Competitors also offered additional benefits such as Traditional Chinese Medicine coverage, dental, optical, mental health support, fitness subsidies, and Employee Assistance Programs (EAPs).
Recommendations
Based on our findings, we proposed a comprehensive strategy to align the client's offerings with market standards:
- Increase leave to exceed the market average of 19 days, adjusted for seniority.
Introduce one-month AWS.
Expand health coverage to include dependents and comprehensive plans for employees.
- Gradually introduce additional benefits such as dental and optical coverage, and flexi-benefits like fitness subsidies and EAPs.
Implementation & Outcome
The client embraced our recommendations, leading to remarkable results in dramatically reduced employee turnover rates, which significantly increased average employee tenure from months to years. Providing comparable or above-market benefits enhanced our client’s employer branding and market positioning, allowing them to attract top-tier talent from their desired companies.
Key Success Factors
- Our compensation report was tailored specifically to the client's unique situation and goals.
We collaborated closely with senior management to ensure alignment with strategic objectives.
- Our unique industry network allowed us to gather accurate, current primary data..
Including top-tier players as part of an aspirational benchmarking analysis positioned the client to attract high-calibre talent.
- Recommending a phased implementation of additional benefits allowed for budgetary flexibility.
Concluding Thoughts:
This case study demonstrates the power of a data-driven, customised approach to compensation benchmarking. The result was a significant improvement in their ability to attract, retain, and motivate top talent in a competitive market.
Our unique value proposition lies in our ability to deliver bespoke, comprehensive compensation intelligence that goes beyond surface-level data. By combining deep industry knowledge, extensive networks, and strategic insights, we empower our clients to make informed decisions that drive real business results.
