HIRING AND COMPENSATION SLOWS AS SINGAPORE GEARS FOR CHANGE
While 2019 began as a promising year for recruitment in Asia, the ripple effect of a slowing global economy has seeded uncertainty within the region. This has contributed to a more conservative outlook for hiring and compensation in 2020, finds the latest Asia Salary Guide report by leading recruitment experts Hays. In Singapore, employees remain realistic in their salary expectations but consider work-life balance and company culture equally important for retainment.
This year marks the 13th edition of the annual Hays Asia Salary Guide, which remains a definitive snapshot of salaries for positions across industries in Asia. The salary and hiring insights, including a thorough market overview of business outlooks, salary policies and recruitment trends, are based on survey responses from close to 6000 working professionals located in the five Hays operating markets in Asia; namely China, Hong Kong SAR, Japan, Singapore and Malaysia.
In Asia: Organisations gear for uncertainty
Despite optimistic projections, 2019 meted out market uncertainties that had some industries bracing for impact. This is most evident by the majority of employers in the region (42 per cent) expecting a softening general outlook for their local economy in 2020, marking a decisive turn from the ‘static’ outlook that was voted consecutively for the last three years. An increasing number of companies also expect to give no increments to their employees in 2020, a number that climbed from six per cent in 2017 to 17 per cent in 2019. And while most employers still plan to award more than 50 per cent of their staff with bonuses (44 percent), more employers also plan on giving no bonuses in the coming year (14 per cent), as compared to last year (11 per cent).
Such an outlook will necessitate transformation, both in organisational structures and skillsets, which will result in new job roles and opportunities for professional development. This is evident by most organisations still expecting increased business activity (59 per cent) and headcounts (43 per cent) in 2020. Of all the Asian regions, Japan is expecting the highest increase in staff (52 per cent), as is evident by its tight labour market and falling unemployment numbers.
Candidates remain determined amidst looming skills gap
While the uncertain economic climate may have shook organisations, candidates seem as determined as ever in their search for greener working pastures. More candidates are actively looking for a new employer (36 per cent) as compared to last year (31 per cent), with their primary drivers for doing so remaining unchanged from the last four years; namely ‘salary or benefit packages’ (62 per cent), followed by ‘seeking new challenges’ (48 per cent) and ‘lack of career progression’ (45 per cent).
Their expectations for increments remain high as well. In the next 12 months, the majority of candidates across Asia expect increments of ‘between 3-10%’ (24 per cent), followed by ‘greater than 10 per cent’ (22 per cent), and finally ‘1-3%’, (21 per cent). While most employers expect increments to fall in the first two categories (35 per cent voted for each), only a mere four per cent are expecting to give out increments of ‘greater than 10 per cent’. This could indicate a possible mismatch in higher salary expectations moving forward.
The majority of candidates believe their skills will continue to be relevant in the next five years (64 per cent), more are unsure of this (27 per cent) as compared to last year (24 per cent). This may be a result of economic uncertainty combined with the ongoing rapid pace of digitalisation that continues to transform job markets across the region, resulting in a pressure to upskill. Organisations are also increasingly aware of the impact skill shortages may have in the coming year, with a little more than half (51 per cent) being confident that they had the talent needed to achieve their current business objectives. Of these, Malaysia was the most confident (62 per cent) and Japan was the least (31 per cent).
In Singapore: Wages slow as skills gap increases
Results of the survey revealed that while only 36 per cent of employees in Singapore were actively looking for a new job, 45 percent were still open to new opportunities. Of all Asian markets, respondents in Singapore were most likely to stay in their current jobs because of work-life balance (48 per cent) as well as management style & company culture (38 per cent). This may be attributed to increasing reports of work stress and poor work-life balance that have positioned Singapore as having one of the most overworked populations in the world.
Wage increments may be reaching a stagnation in Singapore, with most organisations expecting to raise only up to 3 per cent (42 per cent). The only other country with a majority in this lower category of wages was Japan (54 per cent). However, professionals appear to be realistic in their expectations and match these expectations, with the majority also expecting increases of up to 3 per cent (26 per cent). However, Singaporeans reported being most satisfied with their current compensation packages (56 per cent) after Hong Kong (61 per cent).
A little over half of organisations in Singapore were confident they had the talent needed to achieve their current business goals (52 per cent) and were most likely to consider hiring expatriates for skill short areas (60 per cent) after Japan (67 per cent). This may indicate a skills gap, as Singapore had the highest number of respondents in Asia who spent zero hours upskilling themselves outside of their job (26 per cent).
Grant Torrens, Regional Director at Hays Singapore commented, “While 2019 was a challenging year for the region, Singapore has braved much of the economic fallout and maintained a healthy recruitment market. However, as the results show, the impact of this will still be felt in 2020 as organisations become more cautious with hiring and compensation. Considering a significant amount of businesses are unsure they have the right skilled talent to reach their objectives, candidates can differentiate themselves and counter wage stagnation by upskilling in areas of high demand, as well as showcasing their adaptability to changing business needs. On the employer side, making provisions for better work culture and work-life balance could help retain top talent at a time when cost control is paramount.”
To download your copy of the 2020 Hays Asia Salary Guide, please click here.
Hays plc (the "Group") is a leading global professional recruiting group. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. As at 30 June 2019 the Group employed 11,500 staff operating from 265 offices in 33 markets across 20 specialisms. For the year ended 30 June 2019:
– the Group reported net fees of £1,129.7 billion and operating profit (pre-exceptional items) of £248.8 million;
– the Group placed around 81,000 candidates into permanent jobs and around 254,000 people into temporary assignments;
– 18% of Group net fees were generated in Australia & New Zealand, 27% in Germany, 23% in United Kingdom & Ireland and 32% in Rest of World (RoW);
– the temporary placement business represented 57% of net fees and the permanent placement business represented 43% of net fees;
– Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada, China, Colombia, Chile, the Czech Republic, Denmark, France, Germany, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Romania, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA