The Thai government should consider carrying out a study on the feasibility of allowing the free flow of provident funds collected from foreign workers, to other parts of Southeast Asia, tax-free, said New York-based Towers Watson recently.
The move would speed up the mobilisation of employees regionally in readiness for the ASEAN Economic Community (AEC) in 2015, the global professional services consulting firm said.
Not only Thailand, but all 10 countries of ASEAN should create a “tax policy perspective” in order to encourage the flow of employees within the single market of the AEC, the company also said.
The United Kingdom and some European countries had already introduced measures enabling foreign workers to transfer “certain benefits” to other countries tax-free, said Chris Mayes, director of benefits for Towers Watson Thailand.
At a time when there was a rising number of Thai companies investing in the region, it was a good opportunity for Thai firms planning operations elsewhere to learn about the employment regulations and benefits for local staff in those countries, said Mayes. To secure business in the long-term, he said it was essential that staff were treated in line with local employment requirements of the country they planned to do business in.
Speaking after presenting the company’s survey “2013 Asia Pacific Benefits Trends“, Mayes said it was clear that Thai companies had invested a significant amount of money in setting up benefits for their employees. The survey, he said, showed that almost 40 per cent of companies in Thailand had spent 20 per cent or more of their total payroll on benefits. The survey was conducted from February to March this year, with 1,066 respondents in varying industry sectors across the region. Five per cent of them were Thais. The survey is carried out every two years.
However, Mayes said cost remained a major concern for Thai companies implementing a benefit strategy for workers over a 12-month period. The survey found that 77 per cent of Thai companies acknowledged that the rising cost of employee benefits would be a major challenge for them when planning regional expansion.
Mayes acknowledged that the global economic uncertainty had forced many companies to take a closer look at their budgets. However, he said results of the 2013 survey were very similar to those of two years ago, suggesting that the cost of benefits had changed little in the Asian region.
Mayes also said the amount spent on benefits was not the main issue. What mattered most was how companies maximised the use of those benefits within their budgets. Clearly, employee benefits were the best way to invest in one’s workers, as well as attract new talent to a company. This in turn strengthened a company’s competitiveness and set it apart from its rivals, he said,
Survey figures also indicated that 68 per cent of Thai companies were planning benefit strategies over the next 12 months in readiness for the AEC and greater regional competition.
In terms of the variety of benefits in 2013, Thailand had fewer companies with a choice of benefits – only 14 per cent – compared with the regional average of 18 per cent. Given the increasing workforce diversity, a traditional one-size-fits-all benefit programme may no longer be effective, Mayes said.
The company also said that with the increasing competition for talent, firms should ensure an alignment of their benefits strategy with the values of employees. In other words, benefits should be based on the “lifestyles” of employees, which would lead to a better understanding of their needs and greater job satisfaction.