Attracting and retaining future-ready talent in today’s fast-changing environment is a key concern for companies in Singapore.

The much-anticipated 2023 Manpower Survey by the American Chamber of Commerce in Singapore focuses heavily on these issues and shares valuable insights on the driving forces shaping the human capital space.

Conducted between August and September 2023, the survey, which polls 147 senior executives from member companies, reflects the observations, trends, expectations, and challenges of the HR landscape in Singapore. Approximately two-thirds of these senior executives represent multinational organisations with a presence in Singapore.

With the economic slowdown in 2023, many companies have chosen to cut back on spending or reduce headcount. The knock-on effects have varied and the 3.92 million workers in Singapore, of which 1.48 million are foreign workers, are experiencing a cooled labour demand.

The survey highlights the latest manpower challenges as well as areas that have seen progress.

Here are 5 key takeaways and what these could mean for your firm.

1. Hybrid working is becoming institutionalised

This means that organisations have a more concrete vision of what hybrid working would look like and are taking steps to facilitate movement in line with this vision. 46% of the organisations polled have embraced and adopted policies for hybrid work while 49% are in the process of putting their hybrid models into place. The positive adoption of hybrid work and the corresponding shift in both mindsets and skillsets is a step in the right direction.

As pointed out by Minister for Manpower Tan See Leng at the Tripartite Alliance Award 2023, 70% of employers are already offering flexible work arrangements on a sustained and regular basis and companies that do not embrace them will find it increasingly difficult to attract and retain talent.

2. Hiring is muted, with companies focusing more on productivity

Organisations polled are largely planning to maintain their status quo in headcount in the medium term. The survey revealed that two-thirds of companies will either maintain or reduce their headcount – a stark contrast from the past two years where around half of the organisations polled were expanding headcount for their Singapore offices. With a bumpy start to 2024 expected and division by investors over whether the U.S. economy will enter a recession, the current conservative stance is not unexpected.

This also corresponds with the survey data, which indicates that more companies are focusing on productivity and profitability, while cutting back on progressive measures, like workplace health programmes and flexible benefits. As such measures help to build a more inclusive workforce, companies should be mindful about the potential negative impact on employee engagement and wellbeing in the longer term.

Evelyn Chow, Managing Director, DecodeHR, observes that there is no better time than now to intentionally explore and implement suitable workplace tools and technology to augment the capabilities of an organisation’s workforce. “Companies must proactively seek to understand how best to tap on AI-enabled technology and augmented reality/virtual reality technology. These tools can improve collaboration across virtual teams, accelerate the development of new products and services, and also improve customer experience and team engagement.

“If we effectively manage the adoption process and change journey, the huge plus is that organisations will be able to reap the benefits of reduced carbon footprint, and better employee work-life balance, in addition to reduced operating costs in time to come.”

3. Hiring Singaporeans for senior level and regional roles remainS a challenge

While more Singaporeans have been stepping into higher ranking positions in the last few years, there is still room for improvement. Just one-third of the companies polled have locals occupying over half of the senior positions in Singapore.

The lack of specialised skills and work experience remain the key challenges in hiring Singaporeans for such roles. The number of Singaporeans taking on regional roles has also remained flat in the last two years, despite borders reopening. Companies should continue to boost the skills of Singaporeans and provide emerging talent with more opportunities for international exposure.

“Individuals who are eager to pursue international exposure must not rely solely on their employers to create opportunities for them and should take up overseas postings only if all their preferences are checked,” adds Evelyn.

“It’s important for individuals to take ownership of their careers and recognise the wisdom of investing in research and individual introspection to understand how they can take better control of such conversations with their manager at work. Having a clear idea at the outset as to what is a deal-breaker and what is a nice-to-have makes all the difference as one embarks on these career conversations.”

4. Technology, Operations, and Management positions are the most difficult to recruit for locally

When examined further, the survey revealed that business sectors with the biggest difficulty in hiring locals were management at 29%, operations at 22% and tech at 21%. This is in line with findings which show that in 46% of cases where foreign talent is placed ahead of Singaporeans for mid-to-senior positions, local applicants for the role were lacking technical skills and knowledge deemed essential for the job.

On a positive note, there are now more local candidates for entry level positions compared to earlier years. Companies are also more keen to hire local talent, with fewer indicating that Singaporeans are unwilling to take risks or have insufficient international experience.

5. New work pass frameworks focus on attracting top global talent

Companies are now more well-versed with the recently implemented COMPASS framework, with 81% of respondents saying they were either familiar or somewhat familiar with the system. While most agree that COMPASS was an improvement over the current Employment Pass framework, 39% are unsure if they can access the talent required, with close to two-thirds of the companies saying that the increase in minimum qualifying salaries has impacted the renewal of their Employment Pass (EP) and S Pass holders. That said, three-quarters of companies are aware of specialised work passes and consider the ONE Pass useful in attracting top talent with the right expertise.

On the whole, the insights gained from the 2023 Manpower Survey reflect the current economic and geopolitical climate. Upskilling should remain a focus for both employers and employees to ensure continued employability in the changing business environment. Beyond that, Singaporeans should also be willing to take risks, adapt to new challenges, and gain overseas experience.

In the longer term, this approach will pave the way for increased local representation in leadership positions and regional roles. By growing the capabilities of its local workforce, and leveraging the strengths of foreign talent, Singapore will be able to maintain and enhance its attractiveness as a destination for international business.

For further guidance on recruitment or advisory needs, contact a representative at DecodeHR today.