HR professionals can ill afford to neglect this finding that companies in Asia-Pacific, which give preference to training and skill development over compensation packages, succeed in retaining talent.

Today's most successful companies are those which are looking for more sophisticated ways to link the 'total rewards' to support their business strategy, Mercer Asia Pacific Total Rewards Survey said.

"Investments in training and development of employees help the companies create 'employer brand' that differentiates them in the war of top talent, making employees come and stay in such an organisation for longer periods," Mercer Asia Pacific Human Capital Business Leader Rajan Srikanth said.

'Total rewards' is a talent management strategy sketched around three factors -- compensation, including basic pay and incentive; benefits inclusive of retirement plans and work-life programmes; and careers which incorporates stretch assignments, training and development and other opportunities within the country.

Under this system, maximum weightage is given on training and development of employees as opposed to traditional systems where salaries and other monetary benefits were thought to be the most important factors to attract and retain employees.

"With the global war on talent showing no sign of relenting, organisations are striving to balance employee value proposition with more dollars on training and less on base pay to attract, retain and engage employees," Srikanth said.

As employers in the Asia-Pacific region compete for scarce talent with high demand skill sets, they are shifting some of the rewards investments focus to increase their competitive advantage.

Over 64 per cent of employers are investing primarily on training and career development followed by non-cash recognition awards at 43 per cent, with annual cash incentive coming third at 34 per cent and base salary at 27 per cent as a strategy used for retaining employees.

More than 92 per cent of the employers who have adopted this practice have been able to attract and retain the potential talent, especially in the areas of engineering, sales and marketing, as per the survey.

However, 76 per cent of the participating companies said that aligning the total rewards strategy with the companies' business strategy was a difficult task, while 75 per cent found segmenting and differentiating high performers to implement the reward strategies was a challenging task. 

The study examined the unique features of total rewards practice in over 750 organisations in the Asia-Pacific region across 12 markets and eight industries.