Another year has wrapped up and it had been a really interesting year in the job market. The introduction of Jobs Bank, foreign talents quota changes, employment acts, and the low unemployment rate have collectively morphed the recruitment scene in ways not seen before.
As we begin 2015, what are the new changes and challenges job seekers and recruiters can expect?
Here is what I think we can be expecting:
1) Double-down on non-labour productivity drive
The Singapore government has been incessant about the need to drive business productivity as they show no signs of budging over the reduction in work pass quotas as well as the more stringent approval process.
Many different grants and subsidies have been made available to businesses to leverage on technologies to drive their business differently. Adoption of the Productivity Innovation Credit has been sky high, not counting the other schemes from SPRING Singapore and IDA.
However all these measures have not trickled down to improving our productivity. Based on the latest data from Department of Statistics Singapore, our productivity growth is standing at -1.4%.
With more than SGD$3 billion spent and another SGD$3 billion to go, this isn’t a desirable outcome.
I expect government to step in to validate expenses to ensure it correlates with productivity gains. They may also encourage businesses to look beyond procurement of laptops and invest in leading edge technology to radically evolve their business.
2) Non-traditional talent pool
With tightening of work pass and low unemployment rate of 2%, it has been increasingly frustrating for Singapore businesses to execute their strategic plan when they don’t have the numbers or their workforce just keeps churning every few months.
Although we have a population of 5.5 million, only 3.3 million are Singapore citizens and another 527,000 permanent residents. Take away those that are not employment-ready, you are left with half the size.
Even though that pool might seemed large, the concentration has always been amongst the same demographics.
As the challenge of getting workers becomes more and more prevalent, I expect employers to seriously start embracing talents from other pools that they might not have considered before.
These would be the mothers that need to work part-time, the offenders that have turned over a new leaf, the persons with disabilities, and the individuals that prefer to freelance.
3) Crowd Sourcing Recruitment
With cost of hiring escalating and how we are becoming more and more connected, businesses are looking for an alternative to provide the same (if not better) results with lower outputs.
LinkedIn was that alternative a couple of years ago with many still transiting to it in a full blown manner as a means to replace/complement their existing recruitment strategies.
But you don’t really need 259 million candidates (as of June 2013) when all you need is just three. This is where crowd sourcing will come in handy. It has shown to be really effective on sites such as kickstarter and indiegogo. How it will translate into recruitment remains to be seen, but companies such as PeerBrief and MeshHire are already seeing various forms of success in clients acquisition. Companies such as Microsoft, CISCO, Nike, and IBM are already using them.
I expect them to form the next main competition for the recruitment sector.
4) Greater competition in the agency recruitment sector
There are a total of 3,461 registered recruitment agencies in Singapore (as of 29th Dec 2014). The number was close to 3,000 a year ago. Granted most of them would be domestic helper agencies, the number of professional recruitment companies starting up/entering Singapore is still very much felt and noticeable.
We now have two magazines that cater just for the agency recruitment sector, and Staffing Industry Analysts had one of their inaugural events held here in Singapore late 2013. As Singapore remains the focal point of South East Asia, I expect more agencies from saturated or reclining markets such as Japan, Australia, and UK to be keener to explore having an operations here to ride the growth.
Hong Kong is also touted as a good destination but despite the closer proximity to the China market, the politics there would not make it very welcoming for foreign businesses.
5) ASEAN Economic Community 2016
The ASEAN Economic Community (AEC) shall be the goal of regional economic integration by 2016. AEC envisages the following key characteristics: (a) a single market and production base, (b) a highly competitive economic region, (c) a region of equitable economic development, and (d) a region fully integrated into the global economy.
One of the key AEC areas of cooperation include human resources development and capacity building. Importantly AEC will transform ASEAN into a region with free movement of goods, services, investment, skilled labour, and freer flow of capital.
The framework is there but the details are still fuzzy. With a delayed timeline of 2015 to 2016, I doubt there would be another kicking of can down the road. With more details coming up after agreements by participating nations, it would give employers a better understanding of how the freer flow of skilled labour will affect their existing businesses and also bring about new opportunities never seen before!