Recruitment trends in Singapore:
Increase in wages and shortage of talents for third year running
As a result of Singapore's robust economic growth, the country's unemployment rate has dropped to its lowest level in three years.
As of March 2011, the rate fell to 1.9%, 3 points lower than 2.2% at the end of last year.
The average monthly income increased 3.2% in the first quarter of 2011.
Experts expect wages to expand 4-6% this year.
While the hiring environment in Singapore is advantageous to job applicants, rising wages and the shortage of talent are making companies to be more prudent in who they hire.
"There is a gap in the skills that is available, and the demand that is out there. So companies are struggling with finding the right people." said the country manager of Manpower Staffing Service, Mr. Peter Haglund.
The Ministry of Manpower(MOM) announced that total employment rose by 28,300 in the first quarter of this year, led by the services sector.
The 54,000 job openings in just March 2011 alone is the highest since the MOM started tracking the monthly figures in 2006.
Singapore's manpower crunch is forcing companies to turn to contract staff as the solution.
Finance and accounting recruiting firm Robert Half said that contract staff could offer niche skills that are in shortage. "In such cases, they can command a pay premium of between 5% and 10% over their permanent staff", commented a Robert Half spokesman.
In a case study cited by Ms Georgie Chong, executive general manager of Hudson (which provides professional staffing, outsourcing and human capital solutions),
one of her candidates was recently offered a job in an investment bank for an annual package of S$320,000.
After this candidate informed his current boss about the offer, the latter had to give a written promise of promotion with an increase of salary to $340,000 in order to make him stay with the company.
As seen in the above case, Singapore's tight labour market has resulted in heating up monetary incentives.
Noting this situation, human resource provider Randstad's regional director Karin Clarke emphasized that it was inevitable for companies to redouble efforts to improve workforce productivity and talent management to sustain the tight labour market.
"We need to provide staff with clear career opportunities, offer innovative reward and recognition programs, particularly for the Millennial Generation in addition to existing employees", she said.
Increases in wage and shortages of talents both sound harsh to us. However, the solution to these challenges may lie in companies adopting sound talent management policies.