Skills shortage hinders APAC hiring spree

Talent drain in Asia-Pacific region gets in way of companies' plans to increase manpower in second quarter 2011, reveals new report on hiring activities across Singapore, China and Hong Kong.
Written by Jamie Yap, Contributor on

A dearth of appropriately-skilled talent is the single biggest recruitment challenge faced by companies in Singapore, Hong Kong and China, even as they plan to increase their headcount in the second quarter of 2011, reveals a new report which highlights Singapore businesses, in particular, face significant difficulty in retaining staff.

In its report released Thursday, recruitment agency Hudson revealed that 81 percent of Singapore-based businesses encountered hiring woes due to a shortage of skilled candidates. This figure is much higher compared to companies in Hong Kong at 69 percent, and China at 62 percent, Hudson highlighted.

Conducted in March, the quarterly study polled over 1,650 key employment decision-makers from multinational corporations (MNCs) across Singapore, Hong Kong and China--namely, Shanghai and Beijing. In total, 450 respondents were from Singapore, 550 from Hong Kong and 670 from China.

The report found that across the three Asian markets, recruitment challenges increased this second quarter compared to a year ago. Some 73 percent respondents in China saw the "greatest difficulty" in finding talent, compared to 69 percent in Singapore and 65 percent in Hong Kong.

IT staff retention another hurdle
Hudson also observed that besides talent recruitment, staff retention was a "major issue" in the "continuing war for talent" across all three markets, especially for Singapore.

Some 52 percent of companies in the island-state pointed to retaining top talent as the most critical HR (human resource) challenge over the next six months, higher than businesses in China (36 percent) and Hong Kong (26 percent). In contrast, the two East Asian economies highlighted hiring the right staff as their biggest HR concern.

Pay demands by job candidates also contributed to recruitment difficulties, Hudson pointed out. Nearly half, at 49 percent, of Singapore companies and 61 percent of Chinese companies cited this as a challenge.

In comparison, 38 percent of Hong Kong employers faced the same remuneration issue. Instead, 41 percent said their hiring problems were caused by the need to attract candidates with the "right cultural fit", which Hudson attributed to employers' preference for staff with experience in a multicultural environment.

In an e-mail interview, Georgie Chong, executive general manager of Hudson Singapore, told ZDNet Asia that most companies in Singapore adopt "by-the-book strategies" in talent retention, which include employee recognition programs, monetary incentives and work-life balance.

While these are good initiatives, employers need to instill a sense of purpose and worth in their staff in order to retain talent, she pointed out.

Maureen Ho, HR consultant at Hudson concurred that employee engagement is an "area that many companies do not put enough emphasis on". In her e-mail, she said, "The full gamut of talent management plus reward and recognition systems is integral to staff retention strategies, which are often lacking in many Singapore businesses."

Despite the recruitment obstacles, all three economies saw higher hiring expectations year-on-year, particularly for China and Hong Kong where activities reached an "all-time high".

According to the Hudson report, 77 percent of Chinese respondents planned to increase their headcount this quarter, up from 64 percent a year ago and 72 percent in the first quarter of 2011.

In Hong Kong, a record 69 percent of businesses planned to increase hiring, compared to 59 percent in the second quarter of 2010.

Singapore's hiring expectations remained "steady", where 61 percent planed to hire more manpower this second quarter, a slight dip from 62 percent in the previous quarter. Nonetheless, the figure was a healthy increase from 54 percent in the second quarter of 2010, Hudson pointed out.

Hiring increase in IT&T
The recruitment agency further noted that while sales professionals saw the greatest demand in terms of hiring across all three Asian markets, compared to those in the IT&T (IT and telecommunications) sector, employers were still looking to increase headcount in the latter industry. According to Hudson, 79 percent of respondents in Hong Kong planned to hire professionals in the IT&T sector, followed by 76 percent in China, and 65 percent in Singapore.

Chong said in the report that the latest statistics indicated that the Singapore market was "stabilizing at a high level" with hiring expectations staying "upbeat across all sectors".

Chong added that the strong recovery from the economic downturn made recruiting attractive candidates "problematic" since more companies were hiring.

Mike Game, CEO of Hudson Asia, concurred, noting in the report that with buoyant hiring forecasts this quarter, it was "no surprise" that all three markets were finding it harder to recruit top talent now compared to last year.

Hudson's findings echoed other employment reports including Robert Walters' Salary Survey 2011. The recruitment agency found that employers in Singapore were willing to dish out higher salaries this year for candidates with niche skills.

In addition, with abundant job opportunities, Robert Walters noted that candidates were increasingly turning to contract assignments, rather than full-time employment, to gain more varied experience. It added that this trend was driving the "war of talent" among companies to retain top employees.

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