Thursday, January 18, 2007

The Hudson report, Q1 2007, Singapore – Employment and HR Trends.

“Employment expectations are rising and companies express a high level of optimism about future performance. But the other side of the coin is severe competition for staff. Companies recognise they must be prepared to look at the ackages they offer which would now include significant increases in salaries and bonuses in order to attract appropriately talented individuals.” Mark Sparrow, Country Manager, Hudson, Singapore.

The Hudson Report (January-March 2007) is a quarterly survey on the hiring expectations across the industry in Asia (Japan, Hong Kong, Shanghai and Singapore). These surveys are conducted by Hudson consultants amongst the executives from multi-national firms. Some of the key findings within the IT and Telecommunications industry in Singapore is given below:

  • Permanent employment expectations: 56% of respondents are expecting to hire more staff in Q1 but an imminent surge is expected as usual in Q2, after detailed planning for the year during the 1st quarter.
  • Permanent employment expectations by job roles: Demand for IT professionals is high at 17%, second to Sales jobs which is at 23%. Banking IT specialists are much sought after as more banks are setting up new operations or upgrading existing operations.
  • Pay increases to attract managerial staff: 57% say they will pay more than 10%, compared to 35% in Q1 2006. Banks however are expected to pay by far the highest increase, with 78% saying the salaries will rise by ore than 10%.
  • Year-end bonus payments: 51% of respondents plan to pay bonuses of more than 10%. Steep rise from 32% in Q1 2006. Banking sector again is making by far the highest bonus payments, with 76% planning to pay more than 10%.
  • Staff turnover: 37% of IT&T companies are experiencing turnover of more than 10%.
  • Reasons for staff turnover: Poaching is the most significant cause for staff turnover with 30% of the respondents attributing the turnover due to poaching. 10% of the respondents in IT&T, which is significantly higher than any other sector agree that ‘Low staff morale’ is also a very significant reason for staff turnover.

The year 2007 from staffing perspective is expected to be as buoyant as the Singapore economy outlook. Banking and IT are two sectors which will see a significant increase in resource augmentation and this is no surprise considering the number of banking institutions that are already/in-process/on the verge of setting up new/refurbishments/upgrade of operations and data centers.

As competition for quality resources heats up amongst the banks here, a major resource crunch is expected and banks and their recruiting partners will have to progressively look at ways to source and import talent from outside Singapore.

This means that further improvement in salary payouts will have to be implemented in order to attract, recruit and retain quality talents from location such as India and Hong Kong.

Of late, we are seeing a reversal in recruiting trend as far as India is concern – companies in India are looking to recruit from outside India. One of India’s largest Software Development company is in the process of luring back Non-resident-Indian IT pros for middle and senior roles for their projects in India and so are most of the MNC banks in India who are facing stiff challenges in recruiting senior level consultants. We are also seeing specialist recruitment firm such as
Job options which is founded and managed by Mr. Achyut Menon. In his own words - “I am pretty convinced that 'global migration' of professionals will be a reality soon, and so it is better to dig ones wells..before one is thirsty!!”. He is of course referring to returning Indian professionals.

This obviously means that companies in India are prepared to match the consultant earnings abroad - dollars to dollars. This will also mean that they are willing to pay the talents within in India which will match their potential earning abroad in order to retain them. This trend is especially prevalent in the banking sector; with so many banks moving their back office support offshore to India this seems to be the obvious.

It therefore, does become necessary for IT&T and banking companies in Singapore to pro-actively look into their existing salary standards and make necessary changes and sacrifices to remain competitive in the fight for quality talents in this part of the world.

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1 comment:

rob said...

I'm really sick of the high tax rates in 1st world countries too... I don't know what they do with all that money.