In today’s fast-evolving workplace, compensation and benefits are no longer defined solely by base salaries, bonuses, or annual increments.

Across the Asia Pacific (APAC) region, employees are placing increasing importance on rewards that are meaningful, flexible, and transparent. These preferences reflect a broader shift in employee values, driven by changing workforce demographics, a growing focus on mental health, and the experience of navigating a global pandemic.

To stay competitive in this tight talent market, organisations must rethink their compensation strategies and align them more closely with what employees truly care about. This means moving beyond a one-size-fits-all model to offer holistic, purpose-driven total rewards packages.

The Evolving Expectations of the APAC Workforce

The priorities of employees in APAC are undergoing a fundamental transformation. According to Mercer’s 2024 Global Talent Trends report, 47 per cent of employees in Asia now say they would prioritise well-being benefits over a higher salary. This marks a substantial shift from the pre-pandemic era when compensation packages were judged primarily on financial terms.

Today’s employees are looking for value-aligned rewards that recognise their individuality. They expect companies to care about their well-being, work-life integration, and long-term growth. This is particularly evident among younger workers, such as Millennials and Gen Z, who are more likely to choose an employer based on culture, flexibility, and personal development opportunities, even if the base pay is slightly lower.

The implications for HR and business leaders are clear. Traditional compensation structures must evolve to reflect a more diverse set of employee preferences and life circumstances.

Flexible Benefits: More Than a Perk, Now a Priority

Flexible benefits are no longer seen as a nice-to-have, but rather a core component of total rewards in APAC. Aon’s Asia Pacific Employee Benefit Trends Report revealed that over 1 in 3 employers in the region are exploring a flexible benefits programme. These programmes are designed to give employees the freedom to select benefits that best suit their individual needs.

Popular flexible benefit offerings in the region include:

Wellness stipends for gym memberships, mental health apps, or wellness retreats
Mental health days and counselling services
Customisable insurance plans that allow employees to select levels of coverage
Learning allowances to support career development
Parental benefits such as extended maternity and paternity leave, childcare support, and fertility treatment subsidies

In Singapore, where work-life harmony is a growing concern, more companies are introducing family-friendly policies and hybrid work arrangements to enhance employee satisfaction and retention.

Flexible benefits empower organisations to show they value each employee as an individual. When done right, these programmes can also serve as a strategic tool for talent attraction, especially in a region as diverse as APAC, where workforce expectations vary by country, culture, and age group.

Pay Transparency: Building a Culture of Trust

In parallel with flexibility, pay transparency is gaining momentum in the region. According to a LinkedIn survey, 91 per cent of job seekers in Asia say that salary transparency impacts their decision to apply for a role. As trust becomes a growing currency in employer-employee relationships, being upfront about how compensation works can set companies apart.

While pay transparency is relatively uncommon across most of Asia Pacific due to cultural norms and a lack of regulatory requirements, momentum is growing. Aon’s 2023–24 Asia Pay Equity Survey found that 79 per cent of companies in the region view pay transparency as important, and legislation is expected in markets like Singapore, Mainland China, India, and Hong Kong. Although only 25 per cent of organisations have proactively shared pay information, many are preparing for future regulations. Publicly listed companies are leading the way, and in Singapore, some firms already publish salary bands or offer clear pay progression paths.

Pay transparency does not mean disclosing individual salaries. Instead, it involves giving employees insight into:

How pay levels are determined
What factors influence salary adjustments or bonuses
The link between performance and reward
Career progression and promotion criteria

A transparent compensation philosophy helps mitigate pay inequities, reduce employee anxiety around pay, and foster a culture of fairness. It also empowers managers to have more constructive and consistent pay conversations.

Time to Rethink Rewards

As the workforce continues to evolve, the way we approach compensation needs to keep pace.

Employees today are looking for more than just a competitive salary – they want fairness, genuine support, and alignment with their personal values. For HR and business leaders, the message is clear: it’s time to rethink what rewards truly stand for and design strategies that reflect the needs of a changing workforce.

Look out for Part 2 of this article.

If you are keen to review your rewards strategies, reach out to us today.