Thursday, August 5, 2010

Cost effective ways to run your HR function Thailand

Whilst many may view Thailand as a low cost country when it comes to HR, the reality is that it is all relative. Yes, staff wages here are much lower than western countries, but as an SME we often earn revenues that are lower than our western counterparts. As such, the need to run an efficient HR department/function is just as important here in Thailand as in other countries. We’ll focus our attention on recruitment, systems and retention.

Utilising the large recruitment firms in Thailand is an expensive endeavour and primarily designed for the larger organisations here. As such, as an SME, the best option for recruitment is to utilise the plethora of online recruitment tools available in Thailand; this is by far the easiest and most cost effective manner in which to obtain applications. But which online tools are the best, and how should they be utilised to achieve the best possible results? Ideal for recruiting middle and senior-level staff and – ideal for recruiting lower and middle-level staff

The above job websites offer excellent rates when advertising multiple positions simultaneously, costing as little as Baht 2,000/position. Contact them and ask for their latest promotional rates.

Job boards such as provide a good opportunity to recruit part time staff and/or lower level staff.

The problem with posting job advertisements online is that because these systems are so user friendly, applicants can literally apply for anything they search for with the click of a button. This results in your inbox being filled with applications that sometimes are completely irrelevant to your advertisement or from applicants who have not really read the job description and who are therefore unsuitable for the position. To minimise these problems:
  • Really think about the position you want to fill. As a small business, you may find it necessary, and cost-effective, to combine responsibilities from several roles in to one i.e. HR / Office Manager, Marketing / Customer Service Manager, Accounting / Finance Manager.
  • Determine what attributes and skills are most important for you, and write the job description keeping these in mind. Focus on job skills and attitude, and try not to be too demanding when it comes to skills that you can easily teach or train.
  • If you are advertising a position that requires good English skills, post the job in English only and ignore any resumes that arrive in Thai.
  • If there are specific skills that are very important, emphasis these immediately in your posting. You want to discourage applicants who do not meet your minimum requirements.
  • If you are recruiting on a budget, list the salary prominently, but refer to the engaging corporate culture and opportunities for growth (discussed below).
  • Refer to your employee benefit program and opportunities for growth (see below)

The other benefit to using job websites are that most packages will allow you to then search their database of candidates via a simple login. You can then submit requests to people if you wish to see their resume; this can be useful when building a database of prospective candidates for current or future positions.

University recruitment – if you require low cost/entry level employees with a degree, approach a university. Often they will allow you to post a notice about an internship or full time position if it is suitable for their students.

Internal HR systems
There are various ways to ensure your organisation is more cost effective when it comes to HR, and they are all related to maximizing the efficiency of your employees and your systems.

Inefficient systems cost you money. Whilst it is not as obvious as other costs, having your staff working at 60% capacity means that you are wasting 40 % of your wage bill. Now, that seems like something that needs to be addressed! So, what can be done:
  • Get involved: Review your team roles, job descriptions and daily activities, Begin daily morning meetings where teams explain what they are doing that particular day. Your involvement as the owner/senior manager will begin the process of improving efficiency.
  • Get organised: Launch employee rules and regulations, contracts, IT policies, time sheets, job sheets and others to confirm job roles and provide monitoring tools. All these dual language templates, and more, can be purchased from the Thailand HR Suite.
  • Demand accountability: Begin formal appraisals, ask for weekly and monthly reports, ensure that progress is monitored and communicated. Your goal is to ensure that when staff are given a task they KNOW that you’ll be asking about it when it is due, not that it can be forgotten.
  • Launch a warning system: Employees should know that if they break the newly established rules or are underperforming, there are consequences. This should take the form of a simple warning process whereby you following these steps when an employee; formal verbal warning, formal written warning, second formal written warning, dismissal. Warnings should be recorded in employee files and stored for 12 months maximum. Warnings should be clear and steps to improve performance should be presented clearly, and signed by the employee. As an added benefit, dismissal in this way will reduce the chances of having to pay severance. 
Retention and benefits
Retention is a key issue for SME’s in Thailand. Preventing that top sales person from defecting to a bigger, multinational competitor is a tough task, but not an impossible one. How can an SME on a budget provide employees with suitable benefits, with the goal of retaining their top team members?
  • Launch an employee benefits program: your team need to know that they mean something to the organisation. This can be done cost effectively. Key is to improve benefits as employees are promoted, and in line with their time at the organisation.
  • Be creative with your benefits program: you don’t need top of the line health care, pension plans and champagne at staff birthday parties. Here are the types of benefits you should be offering:
  1. Company pays for lunch on Friday
  2. Everyone leaves work early on Friday
  3. All staff birthdays include a card signed by all employees, and cake
  4. Staff trips are organised every year – remember, in Thailand this does not have to cost a fortune. A couple of minibuses, a trip to a waterfall or beach, lunch and some dinner can easily be done by under Baht 700/person with a little bit of planning.
  5. Basic annual bonus plan: equivalent of 3% of monthly salary goes in to a savings account and is paid as a bonus at the end of the year.
  6. Pay mobile expenses for employees that need it for business purposes
  7. Provide basic health insurance for middle/senior staff; basic plans from AIA start from just Baht 2,500/year/person.
  8. Launch employee of the month and employee of the year awards – be creative with what these might be. For employee of the year, Baht 5,000 cash is great, but a return flight to Chiang Mai, free hotel night and some spending money is much more exciting
  9. Make staff loans available at fair interest rates
  10. Get yourself on training company email lists and look out for cost effective programs –send your staff on training where required. Some government sponsored courses can be as cheap as Baht 3,000 for 4 days! This is valuable for your employees AND for your organisation as these new skills are applied to operations.
  11. Increase annual leave over time as employees are with you longer.
  12. Have sit down meetings with employees to discuss potential growth within the organisation, and your expectations of them before they can achieve this.
  • Follow through with your benefit program and budget accordingly. Don’t miss an employee of the month award! Do not forget staff bonuses or a staff trip! Your commitment to the program will sell it as much as the 12 items above; it must be something you do willingly and gladly, not begrudgingly.

It is entirely possible in Thailand to cost-effectively recruit, manage and retain excellent teams and HR systems. Taking a little more time, and being a little creative, will save you money and result in a more productive and efficient team. 

Written by Stuart Blott, General Manager, Sutlet Group Co., Ltd

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