Singaporeans and Malaysians continue to prefer short term benefits and perks

15th February 1997

There are heartening signs in South East Asia that both employers and employees are more willing to accept long term incentives rather than traditional fringe benefits, perks, and short term incentives in their salary packages.

This can only be a good sign as economies such as Singapore and Malaysia face escalating problems of employee turnover which put at risk the stable development of competitive organizations for the future.

A recent Hays survey of local CEO packages (excluding expat packages) found a slight but discernable increase in the proportion of the package related to long term benefits such as stock options.

However the largest increase over previous surveys was an increase in percentage of total benefits made up of short term benefits like insurance, allowances and leave and perquisites such as cars, loans and club memberships. The most significant short term benefit in Singapore and Malaysia are discretionary bonuses, which in Malaysia in 1996 averaged 3.4 months for CEO's.

As can be seen from the table below, Singapore and Malaysian packages still differ markedly from packages in US and Australia where long term benefits make up a much higher proportion.

Long term benefits can only assist in developing loyalty and long term commitment to the organization and it is good for the development of effective organizations that these are on the increase, at least in the top management level. As organizations motivate more by external factors such as job satisfaction, ownership and participation and job enlargement rather than external factors, employees and employers can seize the chance to develop together.

The tradition of expecting benefits from employers that have limited relationship to the job is a long standing one in Asia. Such benefits have less relationship to long term business performance than long term benefits, and a high proportion does little to encourage employees to invest and grow with a company. It may be that, in the new global economy it may be an imbalance that we can ill afford.

If so, as the survey shows.., there is a long way to go...

Salary Package Breakdown 1996
(Hays Management Consultants (M) Sdn Bhd)

	Singapore	Malaysia	Nth. Amer.	Australia
Base Salary	57%	57%	35%	44%
Benefits & Perquisites	27%	29%	16%	22%
Short Term Incentives	13%	11%	19%	11%
Long Term Incentives	3%	3%	30%	23%