Singapore: Steady yet Slow Growth in the APACs Most Developed Economy


Singapore remains the APAC region’s most developed economy. Growth in this market is steady but modest. Staff turnover and inflation are relatively low, as they are in most mature markets. However, the demand for talent, especially workers with digital skills, far outweighs the supply afforded by the labor pool. This trend of a shortage of technically skilled candidates shows no signs of abating. The lack of available technically skilled talent affects not only internet businesses but companies in all industries who market themselves online or conduct ecommerce business.

There is a tremendous demand for workers with regional experience in Singapore. As an increasing number of companies are doing business across borders, employers are seeking talented individuals who understand those regions. Above average English speaking and writing skills are also in high demand, while other regional languages are an advantage to individuals in the labor pool. However, regional economic uncertainty is casting doubt over certain industries in Singapore, as recruitment and salary increases grow at a slower rate than previous projections.

Of the 665 employers surveyed in the Manpower Employment Outlook Survey (MEOS) for Q4 of 2015, 16% forecast an increase in staffing levels, 3% anticipate a decrease and 69% expect no change. After adjusting the data to allow for seasonal variation, the anticipated hiring outlook stands at +12%. However, while the forecast remains relatively stable when compared with the previous quarter, it declines by 4% year-over-year. Ms. Linda Teo, Country Manager of ManpowerGroup Singapore said, “The year-on-year Outlook decline, from +16% to +12%, indicates that while employers expect the hiring pace to remain positive, uncertainties such as weak global demand for exports and China’s sluggish economy, have dampened real hiring intentions in our trade-dependent economy.”

Volatility in the stock market and recent devaluation of the Chinese Yuan are leading to employers taking a cautious approach when giving compensation increases or hiring new employees. Analysts expect modest pay increases and bonuses to continue into next year. As with many markets, the falling oil prices have had an effect on hiring and layoffs within the oil and gas sector in Singapore. Workers employed by companies both directly and indirectly related to oil and gas may see more job cuts now and into the first quarter of 2016, as companies become more cautious regarding a rebound in oil prices. Analysts expect oil and gas employers to supplement headcount with contractors, as opposed to full time employees, to replace headcount while limiting risk.

Workers who possess skills in corporate governance and risk audit are easily finding engagement within the finance sector. Growing interest from the Chinese market is creating a need for experienced private banking relationship managers who are proficient in Mandarin. Several employers, both large and smaller financial firms, have entered the banking sector in Singapore within the past year. Financial companies are investing more in risk audit and compliance as a result of a strict regulatory environment created by the government in Singapore.

This competition for jobs within the banking industry is allowing banking institutions to be more risk adverse. This trend means banking industry employers may be more selective when hiring new talent. They choose candidates who are better suited to a specific role, rather than candidates who have only general experience in the industry; those with very specific skill sets tend to be employed much more quickly than others. Given employers can hire individuals who better suit the job description, employers can expect a lower attrition rate and the added benefit of employees reaching their full productivity potential more quickly.

The strongest labor markets are expected in the Finance, Insurance & Real Estate sector and the Public Administration & Education sector, with Net Employment Outlooks of +18% according to the MEOS for Q4 of this year. The banking and finance industry is expected to see positive growth, especially in the private banking sector, and continued hiring to meet the demand anticipated through the New Year.

Meanwhile, Wholesale Trade & Retail Trade sector employers report the weakest sector outlook for the second consecutive quarter, standing at +4% per the Q4 2015 MEOS. Despite the cautious outlook for the wholesale and retail trade sectors, some additional hiring is still expected. “Theyear end is traditionally a busy period for retailers who have to cope with more demand from shoppers. So, more hiring of contingent workers, in particular, can be expected,” according to Ms. Teo.