As we step into the next decade, organizations will need to proactively address the economic, political, and therein, talent challenges of the past decade. Economic uncertainty prevails, with a sliver of positivity in some regions. APAC seems to be a bag of contrasts, with Japan, China, and Malaysia expecting a slow-down, and Indonesia, Philippines, Thailand, Vietnam and India expecting a slight upswing. Singapore and Australia-New Zealand are predicted to go steady. Overall GDP growth in APAC is expected to drop to 5.7% in 2020, from 5.8% in 2019*.
Singapore upholds a unique economic and talent environment in the APAC ecosystem. 2019 saw the Singapore economy at its worst in 10 years, with GDP growth pegged at 0.7% by the Ministry of Trade and Industry, as reported by Business Times. This is a significant downhill movement from the 2018 GDP growth of 3.1%. The manufacturing sector contracted 2.1% YoY in Q4. Yet, economists predict 2020 to be stable owing to the services sector performing well- it grew 1.4% YoY in Q4, and 0.9% in Q3.
The way ahead for Singapore is uncertain, with economists predicting a cautiously positive outlook due to this pot-pourri of economic and trade factors that lead us into 2020.
Talent challenges in Singapore
Singapore has a highly diverse talent landscape due to its quick emergence as a strategic APAC hub, and lack of locally available talent. With the digitalization of work, new challenges have emerged.
Blurb: 92% of employers find it difficult to recruit new talent with appropriate IT skills- higher than the Asia-Pacific average of 80% and also the highest globally.
This challenge extends to building talent as well- 93% of Singapore employers say that they find it difficult to train and hire staff to cope with new technologies. Much of this resistance to change stems from people questioning whether the effort or cost to implement new technologies exceed the benefits. And an ingrained belief that the technologies are unproven, and even operational issues such as difficulty integrating new technologies with legacy systems.
Interestingly, tech-transformation remained the dominant focus for companies in Singapore, through 2019. 2020 shall see high demand for technology and digital professionals, but also for technologically and digitally savvy talent across all functions. 2019 saw reduced hiring activity in traditional roles such as transactional accounting and operations, in the financial services, industrial and manufacturing sectors. This indicates changing trends towards more futuristic skills and ways of working, and also the breaking free of perception-barriers. While technological and digital transformation are expected to drive the skill-demand, the importance of business skills cannot be undermined in a commercial, global market like Singapore. Organizations will vouch for well-rounded technical candidates with business acumen. For example, a data analyst who can analyse data and recommend business strategies based on the data crunching, would be in high demand in 2020 and beyond. This type of talent is in acute shortage, and the Singapore government shall continue to introduce initiatives that encourage Singaporeans to upskill and transition towards a Smart Nation.
Salary outlook for 2020: Singapore
Yet, we can expect a gap between a candidate’s expectations when moving roles (5-20% salary increments) and salary hike realities (0-12% increments) in the island nation.
Some salary hike expectations of employees, by role are:
- Tech and Transformation: 10-15%
- Accounting and Finance: 7-12%
- Banking and Financial Services: 12-17%
- Human Resources: 8-12%
- Legal: 10-15%
- Sales and Marketing: 10-15%
- Supply Chain: 10-15%
In 2020, professionals in Singapore can expect 1-7% salary increments when staying in their jobs, though exceptions will be there for niche skills. Naturally, bridging this gap of reality versus expectations requires organizations to offer much more than a compensation pay-out.
Way Ahead: How can companies cope?
With the growing focus on skill-sets and potential, and with changing employee expectations, employers must relook at their rewards strategy. The era where mere salary increases motivated an employee to do his or her best is passé. Today, employees expect a plethora of benefits to suit their unique needs and stay motivated and productive at work.
35% employees stated that career progression was their primary motivation in changing jobs.
Moreover, there cannot be a one-size-fits-all approach to the Total Rewards strategy. This is especially true for the Singaporean diaspora, which is highly diverse- locals versus expats, multiple generations, diverse ethnicities and nationalities, returning professionals and so on.
HR practitioners and hiring managers must empathize and understand what a modern-day candidate is looking for. Work-life balance, good working culture and environment, feedback and encouragement from management, learning opportunities, continual challenge and variety in work, and strong, inspirational leadership are the biggest talent-magnets these days. Looking at wider and less obvious talent pools, such as cross-industry talent is a great way to hire niche talent, while providing job seekers (such as millennials) the desired challenge and autonomy they often seek. For this, traditional Asian mindsets need to be replaced by non-traditional outlook, such as part-time or contractual hiring. For example, 2019 saw a shift in negative perceptions around contractual roles opening up, and job seekers have been more open to non-permanent roles.
While the data scientists and cyber specialists of the Singapore economy will most probably continue to enjoy premium talent status through the 2020s, the real talent-edge will depend on how private and public policy comes together to build-buy hybrid talent at the cusp of tech and business.