For A More Competitive Labour Market Like Cambodia, Paying Right Matters!!!

When employees see the clear connection between their work performance and company’s success, they will invest and contribute their effort even more. Higher engagement, boosted productivity, and long-lasting loyalty are also the impact that the company will inherit. Developing a remuneration strategy is the key that unlocks this potential. 

Challenges in Discussing Salary Data in Cambodia

• Skill Shortage: Attracting new employees is no longer a major hurdle, but finding those with the right skills is. The fact that the high performers are more likely to seek better compensation elsewhere has created a dilemma for companies: how to maintain competitive salaries without undermining their existing pay structures. 
• Addressing inconsistency in employee pay in developing countries with large salary spreads can be a complex issue. It’s important to understand why salary differentials exist in the first place, like having different reference points such as international non-governmental organizations and big corporations salaries compared to local companies’ pay, not enough exposure to C&B or limited access to reliable compensation data sets. 
• Data Skepticism: There’s a general distrust of salary data available in the market. Some believe it’s inaccurate, while others think surveys don’t have enough participants to be reliable. Besides, informal sharing among friends and family can impact employee expectations, making them believe they deserve higher salary than their current offer.  
• Reactive Compensation: The lack of a credible source of pay among companies in the market makes benchmarking a difficult mission. Therefore, salary offers are often based on current earnings rather than market value and proper performance assessment matrix. 

Steps to building a killer remuneration strategy 

Top talents crave more than just a paycheck! It’s critical for company to invest in developing an effective remuneration strategy to attract, retain, and motivate them. Get ready for success as Talentnet show you these 5 keys to an effective compensation strategy. 

Step 1: Assessing organizational needs and goals 

Know what leads your company ahead through vision, growth and values before designing your pay plan. Then, get to know your workforce!  What are their demographics and motivations for different employee groups? Once you know these insights, your compensation strategy could resonate with everyone.  

Step 2: Designing the remuneration structure 

After assessing your organizational needs and goals, it’s time to craft salary structure. Be mindful on having a structure balanced between fixed and variable pay components, together with a measurable performance-based indicators rather than intangible metrics.  

Variable pay components, such as bonuses, commissions, or profit-sharing plans, can be powerful motivators for employees to achieve specific goals or key performance indicators (KPIs). It is recommended to incorporate both short-term and long-term incentives to encourage sustained high performance. 

Besides, non-monetary rewards can be an added value for the total rewards strategy, as it increases employee satisfaction and engagement. Some of the suggestion include recognition programs, flexible work arrangements, annua health check or professional development opportunities.  

Step 3: Ensuring market competitiveness and internal equity 

To attract and retain top talent, your remuneration strategy and business strategy must be competitive within your industry and geographic region. Having a comprehensive market benchmarking reports should be the first step to ensure your packages are competitive and unique to win over other market players. This also allows you to maintain internal equity and fairness within your organization.  

Many enterprises still overlook their pay strategies and policies among employees, leading to demerit pay schemes. Building trust with employees is crucial, and this can be achieved by openly sharing information about your remuneration policies, processes, and decision-making criteria. 

Engage employees and stakeholders in discussions about the remuneration strategy. Seek their input and feedback, and address any concerns or questions they may have. This collaborative approach fosters a sense of ownership and buy-in, which can lead to increased employee satisfaction and commitment. 

Step 4: Aligning with performance management 

Linking remuneration to individual and team performance metrics is essential for driving desired behaviors and supporting organizational strategy. Clearly define performance goals and key result areas (KRAs) that align with your company’s objectives. 

Regularly evaluate employee performance and provide constructive feedback to help them improve and grow. By tying remuneration directly to measurable performance indicators, you can encourage behaviors that contribute to your organization’s success. More than that, this can shift some salary negotiating power from employers to employees and candidates, helping eliminate conscious/unconscious hiring biases and forcing employers to be more accountable in implementing fair pay policies. 

Step 5: Continuous evaluation and adaptation 

Your remuneration strategy should not be a static document; it should be regularly reviewed and adapted to remain relevant and effective. Continuously monitor changes in the job market, industry trends, and your organization’s evolving needs. Conduct periodic assessments and gather feedback from employees, managers, and stakeholders. Be prepared to adjust your remuneration strategy as necessary, ensuring its competitiveness, fairness, and alignment with your organizational goals. 

A smart remuneration strategy is a win-win for both company and employees. Fair and transparent compensation built on good principles boosts morale and helps you secure the best talent for the long term. Think of developing a remuneration strategy as the foundation for sustainable growth. Your company thrives because employees feel valued and motivated, and they, in turn, drive your growth.  

To make the best decisions, accurate market data is essential. Get in touch with our experts to get a glimpse at resourceful report from Talentnet’s Total Remuneration Survey reports in Cambodia and participating in Talentnet-Mercer salary surveys provide the insights you need to build a compelling, data-driven remuneration strategy.