ASW CONSULTING - How SEA Companies Kept Their Best People in 2025

With skills shortages intensifying, salary expectations rising, and employee priorities shifting, companies across Southeast Asia (SEA) discovered that traditional retention strategies were no longer enough. What emerged instead was a clearer picture of what truly defines a healthy, future-ready workplace—one that puts people, innovation, and development at the centre.

Boosting Ownership and Belonging

According to McKinsey’s Organizational Health Index (OHI), one of the distinctive traits of SEA companies is the strong sense of accountability and ownership among employees. This pattern appears consistently across organisations in the SEA region.

Employees in SEA score highly in areas such as personal ownership, consultative leadership, consequence management, and rewards and recognition. All these dimensions rank among the top organisational practices in the region, demonstrating how deeply rooted these behaviours are in workplace culture.

McKinsey notes that employees often feel connected to their organisations and to each other, creating an environment where people truly belong and take responsibility because they genuinely care about the outcomes. This forms the foundation for stronger commitment, loyalty, and long-term retention.

Increasing Engagement Via Customer and Community-Centric Cultures

Another insight highlighted by McKinsey’s report is SEA companies’ strong focus on customers, partners, and broader society. Many organisations not only prioritise customer needs but also actively use customer feedback to refine and elevate their products or services.

These companies also tend to invest in relationships with external partners and are increasingly sensitive to their social responsibilities. This outward-minded orientation reinforces purpose within the workforce—employees feel their roles have a meaningful impact, strengthening loyalty and engagement.

Reshaping Compensation Due to Skills Shortages

A pressing challenge across the SEA region is the shortage of highly technical and digital talent. Insurance Business Asia reports that demand for AI and cybersecurity roles has surged by 100% to 160% year-on-year in several countries. Other high-cost, high-demand skills include supply chain optimisation and digital product development.

This shortage is reshaping compensation strategies and pushing organisations to:

• accelerate internal mobility
• invest in workforce reskilling
• offer structured career pathways
• build digital academies and tailored training programs

Companies have increasingly recognised that relying solely on external hiring is no longer sustainable. Retaining existing talent through continuous development has become essential.

Leading Through Innovation and Talent Development

McKinsey’s data shows the top performing companies are those that embrace proactive reinvention. Leaders are not merely directing change—they’re enabling employees at all levels to contribute ideas, challenge existing systems, and develop new capabilities.

A second differentiating factor is a strong emphasis on learning and development. McKinsey highlights that the healthiest organisations invest significantly in upskilling, empathetic leadership, and sustained capability-building efforts. This creates a workplace where employees feel supported, valued, and motivated to grow—factors that directly influence retention.

The Impact of Cross-Border Hiring

As hybrid work becomes the norm, People Matters Global noted that organisations in Singapore, Malaysia, and Thailand are increasingly looking beyond borders for talent. Companies are hiring employees from lower-cost cities in neighbouring countries, reducing operational expenses while tapping into new talent pools.

This trend is blurring traditional salary benchmarks and pushing employers to think in regional terms, not national ones. It also introduces more competition, making retention even more difficult as employees today have more options than ever.

Salary Growth and Turnover Trends

Economic trends also had a major impact on retention in the SEA region. AON 2025 Salary Increase and Turnover Study revealed that wages across most of the countries in Southeast Asia rose in 2025 (vs 2024) but at varying speeds.

HRD Asia reported rapid salary growth in the technology and manufacturing industries at 5.7%-5.8% average increases. Consumer goods and financial services are above 4.9% while the energy and transport industries are between 4.1%-4.5%. These shifts are driven by intensified demand for advanced skills, rapid digital transformation, and increased investment in emerging industries such as AI, fintech, and green technology.

But salary growth came hand-in-hand with rising attrition. According to AON’s findings, double-digit turnover remains a major challenge across the region. Consulting and community services have the highest industry attrition rate at 22.6%. The study also revealed that 42% of businesses struggle to hire talent, while 63% report skills gaps, especially in IT, engineering, and sales. New hire premiums have also dipped, reflecting tighter budgets and the increasing need for longer-term retention strategies.

Retention Requires More Than Pay

Across all data and trends in 2025, one takeaway stands out: salary increases alone cannot fix retention challenges. While compensation matters, employees in Southeast Asia are now looking for:

• meaningful and impactful work
• strong leadership and psychological safety
• clear avenues for growth
• flexible work arrangements
• inclusive cultures that value belonging and accountability

Employers who adapt to these expectations—and who invest in innovation, development, and culture—will be the ones best positioned to retain top talent in the years ahead.

Your Regional Partner for Trusted Recruitment Strategies

Companies in Southeast Asia are looking for more than just hiring solutions. They need strategic guidance on how to attract, develop, and retain the right people for long-term success.

At ASW Consulting—an expert recruitment company in Thailand and Vietnam—we combine deep regional insight with a people-first approach to help businesses thrive in this competitive market.
Our experienced and dedicated talent acquisition consultants in Bangkok and Ho Chi Minh City go beyond matching skills to roles. We focus on aligning talent with company culture, ensuring lasting impact and stronger retention.

Contact us at our recruitment agency in Thailand and Vietnam to learn how our customised recruitment and headhunting strategies can help your business recruit and retain the best talent in Southeast Asia.