Challenges of Local Management in the Pandemic Era: Difficult motivating and retaining talents -- Japanese companies in Asia

• Report

In this article, we would like to introduce the actual situation of labor management at Asian local offices of Japanese companies in this disastrous time.

The salary increase rate of local staff in Asia was 4.2% for the fiscal year 2020, a decrease of 1.1 points from the previous year. This is, of course, the impact of the pandemic. Many countries are below the previous year's level. In addition, the average salary increase rate for the fiscal year 2021 is expected to fall to about 3%. The salary increase rate in Asia had seen a steady growth before the pandemic, but the new coronavirus had stopped this and shifted to decline. Now, Japanese companies are being forced to operate their local bases under very challenging conditions.

Figure 1. Changes in the Salary Increase Rate (Average in Asia)

What labor management issues are Japanese companies facing in this COVID-19 situation?

To the question "Are there any problems in labor management of local staff?”, the below two were the top rated answers.

“Difficulty in motivating local staff” (37.2%)

In overseas offices, there are many staff members who have different cultural backgrounds and values. Activities designed for Japanese employees may not be effective. Respecting the local culture and values, it is important to increase opportunities for communicating with local staff to deepen mutual understanding. In addition to individual meetings, it is also effective to use employee surveys and interviews.

“Difficulty in retaining talented employees” (31.4%)

It is not peculiar in Asia but many companies consider the retention of talents as the top issue. In overseas, there is less resistance to changing jobs compared to those in Japan. So the alignment of the company's philosophy and vision for employees to feel a sense of unity is important. Listening carefully to what the staffs desire and to providing them the career advancement opportunities for their motivation is also important.

Global business in this pandemic era is becoming more and more important to re-think labor issues, such as salary/bonus payments and benefits, in order to increase the motivation of talented staff and to decrease staff turnover.

Please contact us if you would like to know more about details or results in other countries.

2021 Release: Global Salary Report of Local Staffs, Japanese Companies in the Americas

The report includes salary payments, salary increase rates, bonus payment rates, and benefits for local staff at Japanese companies overseas, by country and region. It is essential data for acquiring human resources. The survey has been conducted annually for more than 20 years, and reports are published in a total of 17 countries/regions; 14 in Asia (Cambodia, China, Hong Kong, India, Indonesia, Malaysia, Myanmar, Singapore, South Korea, Taiwan, Thailand, The Philippines, United Arab Emirates, Vietnam) and 3 in the Americas (U.S., Mexico, Brazil). We hope you will find this report useful for your HR strategy, including hiring and contract renewal.