The Thai economy is on the rise and the labour market is getting more competitive, partly because of the government's policy of raising the minimum wage, according to a recent survey.
Globally, companies face a rising talent exodus as economic and labour market conditions improve, according to the study from global management consultancy Hay Group, conducted in association with the Centre for Economics and Business Research.
As implementation of the pay increase takes place, many organisations are not just following the policy but also increasing wages more than the minimum rate so they can retain their best people and compete in the labour market.
The approaching Asean Economic Community will be another driver of competition in the labour market as employment is no longer limited to Thailand.
For global situations, as growth builds and employment opportunities increase, worldwide employee turnover is set to accelerate next year, after broadly flat levels in recent years. Workers taking flight are expected to increase 12.9 per cent to 161.7 million next year compared to 2012.
This trend is set to continue. The employee-turnover rate over the next five years is predicted to rise from 20.6 per cent to 23.4 per cent, and global departures in 2018 will stand at 192 million.
Emerging markets are set to feel the brunt of the turnover spike first, beginning this year, while developed economies will start to see departures with a peak next year, when conditions improve.
Thanwa Chulajata, manager of productised services at Hay Group Thailand, said yesterday that although turnover here is not so high, the higher minimum wage and the upcoming AEC were making the retention of key talent harder than before. It is easier for high-performing employees to leave their organisations because of competitive pay.
With turnover rates forecast to rise in countries with better market prospects, Hay Group’s study reveals a two-speed trend. For workers in emerging markets, new employment opportunities will continue to be plentiful. Employees in the region will be among the first to take flight, while employees within crisis-hit European countries will be slower to make the move.
The Asia-Pacific region will experience its largest spike in employee turnover levels this year, as employment growth and wealth creation continue energising an aspirational and mobile workforce. Organisations in the region will also experience the highest increase in turnover rates worldwide, rising from 21.5 per cent to 25.5 per cent over the period 2012-18 – growth of nearly a fifth.
In Thailand, turnover is at 13 per cent. Though the rate is not high globally, there are signs of increasing labour market competition due to the government’s wage policy and the free flow of labour as a result of the AEC. Retaining employees will be harder than ever before.
To identify the key factors affecting employee retention, Hay conducted a detailed analysis of its employee opinion database, which includes information from more than 5.5 million employees across the world.