Singapore – Signposting the future

Among Singapore’s business community, there is a sense that the country is at a crossroads. Leaders in the world’s most competitive nation are actively looking to redefine working practices and build businesses beyond the island’s shores, with implications for HR and mobility.

Singapore harbour
Being exceptional is Singapore's business. The world's only fully functioning city state has developed into one of its leading economies in just a generation. Currently celebrating 50 years ofindependence, Singapore, in its golden jubilee year, was rated by the World Bank as the easiest of 189 economies in which to do business.Yet there is a sentiment among some of Singapore's business leaders, businesses and trade representatives that its continued economic progress is being challenged. Declining Chinese demand for raw materials and the significant downturn in the oil and gas sector globally are hitting its rig-building and refining businesses, as well as its financial sector.In common with many developed economies, demographic changes, such as an ageing population and rising pension and social care costs, are also ratcheting up the pressure on business as usual.Building on Singapore's Economic Strategies Committee report from 2010, subtitled Highly Skilled People, Innovative Economy, Distinctive Global City and submitted in response to the global financial crisis, business leaders and government are now debating how best to battle the economic headwinds and maintain Singapore's leading-economy status.

Direction of travel

Following the Economic Strategies Committee 2010 report, government policies are seeking to restructure Singapore's economy. The broad aim is to move from an inward FDI-based economy to one that grows through productivity and skills enhancement.Supporting this are strategies to upskill Singapore's workforce in leaner, more efficient workplaces, and diversification into new sectors, such as the creative digital industry.Interestingly for mobility and HR leaders, the discussion between business and policymakers on the way ahead is putting people, skills and culture change at the heart of the action. Within the wider economic pressures and policies, "the biggest issues facing business in Singapore are the recruitment and retention of employees, employee engagement, productivity, and managing change", explains Saradevi Gopal, a researcher at international leadership institute Roffey Park, in Singapore."Certain government initiatives, like work levies – especially for manufacturing and construction companies – organisational culture and practices, like bureaucracy, workload and face time, are also challenging business at the moment," she observes.

Foreign worker policies

As part of its manpower-lean initiative and the wider project to restructure Singapore's economy, the government introduced the Fair Consideration Framework (FCF) in 2013.Through this policy, it is seeking to improve Singapore's skills base and "build a strong Singaporean core" by ensuring the local workforce is considered fairly and on merit to fill vacancies, with the ultimate goal of better jobs and pay. Employers must advertise a job in the national Jobs Bank for 14 days before applying for an employment pass (a visa that allows the holder to work).A Hays study published at the end of 2015 shows the impact of this change. Singapore's Top Ten Talent Trends for 2016 cites workforce localisation as this year's most important HR trend. However, government data for 2015 suggests that the benefit of the FCF for the bulk of Singaporeans may already have been achieved, for the time being at least.Unemployment in Singapore remains low across the board, at around 2 per cent, and employment growth stands at around 0.6 per cent, according to Ministry of Manpower (MOM) data published in January. Median incomes "grew strongly for citizens" in 2015. However, last year saw only a marginal increase in local employment by 100, which compares with 96,000 in 2014.MOM data also indicates that foreign employment, excluding foreign domestic workers, "continued to grow at a moderate pace (22,600, or 2 per cent) in 2015, slightly lower than 2014, but significantly below the levels in 2011 to 2013".

Talent trends

The second key trend for Singapore reported by Hays is the expectation of an even greater focus on talent retention and internal mobility this year, a finding echoed across the Asia region and in other surveys.Fellow recruiter Harvey Nash's survey also finds that its respondents in Asia are more troubled by recruitment issues than the global average. Training and development has also doubled as a priority for the 1,253 HR leaders surveyed, from 28 per cent to 53 per cent in a year.Harvey Nash advises employers to think "far more creatively" about how they attract talent, their employee proposition, and their brand's attractiveness.With a tight labour market adding further upward pressure to wages, businesses are concerned about how to fund them. More investment in training and development could be the answer, especially for the new generations of leaders, who are looking for quality of life as well as high-quality jobs."Singaporean employees' biggest issues are career development, being engaged and satisfied in their work, and having financial stability due to the high cost of living," says Saradevi Gopal.All these factors – government policies, economic restructuring, and the focus on talent recruitment, retention and development – are pushing up demand for HR business partners. Senior HR business partners, learning and development, and talent management specialists are particularly sought after, according to the Hays 2016 Asia Salary Guide, titled Asia at a Crossroads: Can Talent Supply Meet Increasing Demand?

A vibrant Singapore?

Nevertheless, the business community is anxious that policies in their current form could do more to encourage the productivity gains, skills enhancement and sustainable economic growth that businesses, citizens and the government seek to maintain Singapore's quality of life.Influential business and industry representative body the Singapore Business Federation (SBF) published its Position Paper for a Vibrant Singapore in January. A 23-strong steering committee had canvassed the views of three focus groups and 29 major trade associations, local and foreign business chambers on how Singapore could retain its competitive edge.The federation presented its findings to the government and opened them up to wider discussion earlier this year. It is calling for immediate action and for the government to "take a deep dive" to analyse and address the causes of increasing business costs and manpower issues. Given pressures on overheads, the SBF is concerned, for instance, that the FCF in its current form is constraining growth.Employers are reporting recruiting difficulties at both ends of the labour market. In response, the SBF is recommending that the government work both with it and with trade associations and chambers of commerce to review manpower- lean and foreign worker policies."It remains unclear as to whether the FCF will fulfil its intended purpose in the long run. I think it is best to observe how it impacts local companies before arriving at a conclusion," says Saradevi Gopal.
Opportunities for mobility and HRThe SBF also recommends more action to develop Singapore as a strong home base for businesses as they expand overseas through a strategy to support its SMEs to grow outside the country by developing and upscaling local enterprises.This important group accounts for around 70 per cent of Singapore's workforce and 50 per cent of national GDP."The biggest issues are more pronounced for SMEs, due to the limitations they are faced with in terms of manpower and finances," says Saradevi Gopal. She suggests that this could be due to specific factors which some people regard as being related to high-status jobs.This may play a role, in that achievement in certain areas is emphasised over others. But things are beginning to change as businesses and government encourage more young people to aspire to jobs in non-traditional sectors."Small, gradual shifts in the culture – at both the national and organisational level – would probably need to occur first. The interest that the younger generations have in such jobs looks positive, although there still are a number who are choosing jobs based on status, money and the image of the industry or job role," Ms Gopal says."For SMEs, the challenges are recruitment, employer branding and talent management. But there are opportunities to offer from the perspectives of learning and development, and career development."She continues, "For MNCs, the challenges are around leadership development, succession planning and workforce engagement. There is an opportunity here to achieve greater diversity and career development opportunities for certain job roles employees are seeking, including the chance to work overseas."With Singapore's evident appeal for overseas workers, increasing opportunities for outbound mobility, and enthusiasm for addressing its talent challenges, the direction of travel for HR and mobility appears set.

 

APAC global mobility magazine
See more about the Asia-Pacific region in our APAC Summer 2016 digital magazine.

For more Relocate news and features about Singapore, visit our Singapore section and for more about talent trends, go to our talent management section.



 Relocate Global Spring Issue 2016

Read more about Singaporean policies that affect foreign workers and companies in Pro-Link GLOBAL's article, Singapore moves to protect its labour force: What this means for you in the Spring 2016 issue of Relocate magazine