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Jobseekers’ market forces Singapore companies to shake up culture, hire abroad
BORDERS are reopening and businesses are getting back into the swing of things, but a talent crunch that emerged at the height of the Covid-19 pandemic is showing no signs of abating.
Job vacancies are at a record high and there are more openings than unemployed persons in the country. Companies are therefore having to rethink the way they hire, retain and grow.
For private markets platform ADDX, the current manpower situation has meant roles are taking longer to fill.
Fewer qualified candidates come through the pipeline, says Darius Liu, group chief strategy officer. And when a suitable candidate is found, they often have more than one offer on the table.
Callam Pickering, Apac economist at job site Indeed.com, says the dynamics of the Singapore labour market have “shifted quite significantly over the past 12 to 18 months” and created an “incredibly challenging recruitment environment for Singapore businesses”.
While job losses had been a concern during the early days of the pandemic, Singapore’s overall unemployment rate quickly rebounded to a pre-pandemic 2.1 per cent in February this year.
Data from the Ministry of Manpower (MOM) showed the number of job vacancies per unemployed person rose to 2.11 as at December 2021, driven in part by travel restrictions impacting the inflow of migrant workers in some sectors.
Data from Indeed’s portal showed that Singapore job postings as at end-February this year were slightly more than double the level in 2020.
Sectors such as production, engineering, installation and maintenance have at least 150 per cent more postings than pre-pandemic levels, with tech and construction sectors not far behind that, Pickering adds. Even weaker segments such as retail and customer service have seen increased postings.
Supply & demand
Even as borders begin to reopen, Pickering believes growth in the non-resident labour force will be gradual.
“We are not going to snap back to what Singapore was before the pandemic any time soon in terms of the non-resident population.”
Changes in local worker dynamics have also played a part in labour market tightness.
Younger jobseekers are more likely to prioritise meaning at work, according to Foo See Yang, managing director and country head of recruitment company PersolKelly Singapore. “It’s no longer (like it was) 10 years ago, (where) a job is 9-to-5 and that’s it,” he says.
Platforms enabling gig work such as food delivery or ride hailing are also sucking up workers, some of them former professionals or executives, says Ang Yuit, vice president at Association of Small & Medium Enterprises (ASME).
On the demand front, business recovery has led to greater demand. And government grants to support job creation are contributing to employment activity.
Ang points, for instance, to the Jobs Growth Incentive (JGI), which supports employers to increase their local hires.
“While it’s a good idea, it resulted in some cases of very aggressive poaching or hiring from companies that were able to hire,” Ang says, adding that this also created inflation in salaries for certain roles.
The types of roles employers are looking to fill have also changed in the past 2 years, creating new challenges.
Foo of PersolKelly cites the example of the e-commerce industry, which saw booming growth amid lockdowns.
The sector needs manpower in fields such as IT, marketing and logistics, and the roles available often require new skill sets.
Charles Ferguson, Asia-Pacific general manager at employment services company Globalization Partners, says government efforts to upskill and reskill workers through education and private partnerships have been useful. But he adds that there is a “time to value” in such initiatives.
“How quickly can we bridge this gap? The reality is…it’s going to take a long time.”
The different pace of recovery from the pandemic has also meant that some industries benefitted more than others in the race for talent.
“I think there has been a distinct advantage for those industries that were in a position to recover earlier and sort of take advantage of the relatively high unemployment rate that existed at that time,” says Pickering of Indeed.
The talent crunch is felt most keenly by smaller companies, which have relatively fewer resources and lower buffers.
“A lot of SMEs (have lost) people to big companies; the tech companies – Shopee, Lazada – have been very aggressively hiring, so, naturally, the SMEs are the ones that lose the staff,” ASME’s Ang says.
Companies losing key staff while facing tighter requirements on foreign manpower often have to “fight fire” instead of being able to transform, as their “survival is at stake”, he adds.
Accounting and tech roles are most difficult to fill amongst SMEs.
Ang, who is also CEO and founder of a software company, The Adventus Consultants, says hiring local software developers has been a particular challenge in the tech space.
“The churn is too high, so the cost of a company trying to train someone locally and retain is not viable,” he says.
ADDX, too, is feeling the crunch in tech more than in other roles, with specialised positions — such as cybersecurity or blockchain engineering – facing higher wage pressure.
The company has around 100 full-time employees with a mix of Singapore citizens, permanent residents and foreigners. Most of the foreign employees are in tech and engineering.
“These talent pools in Singapore are less well developed,” Liu says.
But Singapore’s employers are not the only ones facing challenges in hiring, with most countries in the Apac region experiencing very strong demand for jobs while borders have been shut.
Indeed’s Pickering notes that Australia is facing a similar situation with the ramping up of hiring activity.
The keen competition regionally means countries are competing with each other for talent.
Data from Indeed showed a 72 per cent rise in searches for overseas jobs among jobseekers in Singapore between March 2020 and February 2022.
Globalization Partners’ Ferguson notes that borderless talent has become more mainstream, but believes this trend could also benefit employees here.
“You’re not necessarily sitting here, waiting for the best job in Singapore,” he says. “Right now…if I have the right type of attitude, the right type of attributes, the right type of curiosity and determination, I can actually raise my profile and get a job from anywhere in the world and not have to leave my home.”
Thinking creatively
Given the challenges in hiring, companies have little choice but to think creatively about attracting talent.
ADDX’s Liu, for instance, believes the company’s positioning of itself as an “exciting enterprise” has helped. “We don’t compete on the basis of pay and benefits alone.”
ADDX has embraced a more modern programming language – for tech architecture and scalability reasons – that has made it more attractive to developers.
“(Developers) want to work on exciting projects, they want to work on a new programming language, and all that. So that is a selling point for us, and we make sure that is something we bring to the market when we are out hunting for talent, among other things,” he says.
Making jobs more attractive to jobseekers is particularly important for SMEs.
PersolKelly’s Foo notes that while multinationals may be more attractive to some, SMEs can still hold their own as some prefer working for smaller organisations.
But rather than simply hiring a direct replacement when employees resign, companies need to reconsider whether the role was an interesting one and redesign jobs to make them attractive.
“The scope of work has evolved. You are matching to Gen-Z in the market, and they may not be appreciative towards what you offer them,” he notes. “They seek value, they seek a career opportunity, how far (and) how fast can they grow.”
As an employer himself, having to deal with matters such as attrition, Foo says adapting to the needs of a future workforce has become even more important, and this goes beyond just salary.
“Singapore companies especially, they really need to look into the current workforce, the current job that they’re offering – the environment, work culture (and) work style,” he says. “They probably need to do quite a fair bit of (an) overhaul in order for them to retain or mitigate loss of talent.”
In a working paper by the Institute of Policy Studies published in April, it was reported that almost 3-quarters of workers in their 20s felt employees should be allowed to work from home at least 3 days per week, more than in any other age group.
With a changing workplace mindset, SMEs are becoming more focused on strengthening their human resources (HR) processes.
“We have seen a lot of companies looking at how to improve their HR processes, more than in the past…how do you retain, how do you build company culture. All of that becomes something that companies are more aware and interested in,” ASME’s Ang notes, adding that having support from the government to build this area could also be helpful.
The offshoring of talent is another solution to the talent problem.
Ang’s own software company retains a small core Singapore team, while the developers are based offshore – a change from a decade earlier when all the developers were in Singapore.
Globalization Partners’ Ferguson says companies can make use of remote work and borderless talents to meet their current talent needs. The idea goes beyond finding lower cost workers, to being able to get the right talent.
“Certainly some roles need to be in your backyard,” he says. “But in many instances, if you can find talent somewhere else in the virtual world – because you don’t necessarily have to travel to that country to secure acquire, retain and nurture that talent – you’re crazy not to do that.”
Businesses such as Globalization Partners helps serve as an employer of record. The company hires talent on behalf of clients abroad, removing the need for businesses to set up a presence overseas to hire international employees.
Amid the pandemic, Ferguson says there has been a “huge, crazy, increase in demand for this business”. New customer acquisition for the company rose 2.5 times from 2020 to 2021, according to a press release in January.
Business in Asia had mostly been inbound in earlier years, but Ferguson says they are seeing Asian companies increasingly using this model to expand worldwide.
“Probably greater than half of my business is now outbound. It’s now Asia going to the world, it’s no longer the world only coming into Asia,” he says. “You’ve got to have speed and agility, and right now, the best way to do that is to remove borders around talent acquisition.”
Indeed’s Pickering believes the competition for talent is going to be much higher than it was before the pandemic, even as borders reopen.
“It’s going to become more difficult to attract that foreign talent compared with before, so it’s going to be very interesting in that space over the next couple of years to see how Singapore businesses and businesses globally react and adapt.”
PersolKelly’s Foo adds that companies need to gear up to attract talent and convince them to stay on. “The word here is war for talent,” he says.“What do you bring to the battlefield? If you come up wearing a singlet and short pants to go to war, then you are dead.”
Source: https://www.businesstimes.com.sg/brunch/jobseekers-market-forces-singapore-companies-to-shake-up-culture-hire-abroad