Wednesday, August 6, 2014

Singapore’s Strong Job Market Faces Challenges

The following was inspired by a recent conversation I had with Andie Rees, Managing Director, and Angela Dunbar, Senior Associate, in Odgers Berndtson’s Singapore office.

Singapore was just voted the Easiest Place to Do Business for the ninth year in a row by the World Bank. With high ratings for attractions like starting a business, low taxes and ease of trading across borders, Singapore draws multinationals and employees.  After a slump following the Global Financial Crisis, employment has been growing again especially for finance, insurance, real estate, and IT roles.

We are hearing that companies that had moved their Asia headquarters to China are now moving to Singapore. Senior managers that are attracted by Singapore’s cleaner air and convenience as an Asia travel hub, among other benefits, may want to consider a few of the challenges of building a workforce there. These include new hiring regulations, cost of living and skills constraints.

Fair Consideration Framework: Singapore’s GDP growth of 3.9% last year is solid but slower than earlier years. Andie Rees said, “Singapore has good talent pool. People who come here want to stay so expat packages have gone away for the most part and the high-end compensation packages are down. Over the last ten years, more people want to stay and want to get permanent residence."
One result is that Singaporeans citizens are almost a minority in their own country. The population of Singapore is 5.4 million. Singaporean citizens number 3.3 million. The balance is made up of “non-resident” residents who may hold work visas. A lot of these are low or semi-skilled workers and their families, domestic workers, and students. Corporate executives comprise about 12%.
The influx of foreign workers along with the slowing job market has driven the Singapore government to make it a priority to hire locally before bringing in a foreigner or “non-resident.” This month the government announced new rules that require employers to consider Singaporeans first before hiring work visa holders. Firms with discriminatory hiring practices will be subject to additional scrutiny and may have their work visa privileges curtailed.
The new regulation puts Singapore on a par with other South East Asia countries that have taken steps to give an advantage to the local population by closing job categories to foreigners (Indonesia) or tightening work visa qualifications (Vietnam).
Cost of Living: Another factor in play for employers in Singapore is living costs, said Angela Dunbar. While taxes are low, the cost of housing, car ownership and education are high. As the costs go up, more headquarters and operations may go elsewhere. Companies and employees can operate at half the cost in countries like Philippines and Malaysia.
Skills Constraints: In addition, the employee market, while generally considered robust with lots of people to hire, has constraints in some sectors. Sales, Professional Services, Customer Support, Marketing, and Human Resources are top priorities for Singapore employers. Multinationals seeking individuals with broad strategic outlook and experience may need to search carefully to fill regional and Asia leadership roles.

1 comment:

Unknown said...

This is really true that Singapore's strong job market is facing lot of challenges but day by day it's recovering nicely. Though need time to recover everything properly but I am sure that it will be very soon and still people are searching to get singapore visa