Skills in short supply
Companies in Singapore, especially in the technology sector, have come under fire for the number of foreigners in their ranks. Employers in this industry say they have to hire foreigners because local candidates tend to fall short in specialised skills, often due to the niche and high-growth nature of their fields, as well as soft skills for effective teamwork and problem-solving. Given their highly specific needs, many have accepted that finding suitable local candidates with the complete skill sets will be difficult, and they now look for individuals who have some of the needed skills and the capability to quickly pick up the rest along the way.
For example, the financial services industry struggle from chronic talent shortage in technology. Banks from Goldman Sachs to UOB are expanding their tech headcounts, while Singapore’s four new digital banks are building teams from scratch. Financial institutions are increasingly competing with tech firms for talent. Google, Amazon and Facebook have substantial numbers of vacancies, while Tencent, Alibaba and ByteDance are all hiring in Singapore.
"Singapore has a very small market for talent. Hiring anyone in tech at the moment is hard, let alone people with specialised skills, so some people get calls from recruiters all the time,” says a senior developer at a US bank.
Current situation: Skills gap in 2021
The government’s drive to prioritise the hiring of Singapore citizens and permanent residents has made recruiters target local technologists. While expats already based in Singapore are still in fairly high demand, overseas applicants are not.
“This trend is even more prevalent during global travel lockdowns. It’s not uncommon for local tech professionals to receive interview requests even when they’re not looking for a new employer,” says Daljit Sall, senior director of information technology at Randstad.
The demand for local talent is so high that many tech professionals eventually end up with several job offers, says Adam Davies, country director for Singapore at recruiters iKas. This has made technologists “more selective” when deciding which firm to work for, says Valerie Corera, principal consultant for tech and transformation at Robert Walters.
“Even when there are plenty of jobs, many technologists are still cautious when switching employers. They will evaluate their options carefully, often asking more questions about their work responsibilities, career progression opportunities, and team culture,” says Sall.
When cold called by recruiters, tech professionals are generally open to conversations with hiring teams at banks, but they typically take a long time to decide if the role is right for them, says Teo.
“They’ll conduct more thorough due diligence through both informal channels – including website reviews and friends at the company – and formal channels, such as requesting more conversations with the hiring team,” she adds.
As recruiters call them out of the blue, tech professionals in Singapore – especially those in sought-after fields such as FX development, cloud computing and data analytics – are becoming more aggressive with their pay demands.
“Most have more confidence in their ability to push for salary increases of 20% to 25% or more, which hasn’t always been the case. Some banks and fintechs are happy to offer more than their competitors to secure the best talent, so these increases are now more common than they used to be,” says Davies. “In this market, it’s natural for technologists to enter into a salary negotiation with rather high expectations. Most local tech professionals can easily negotiate a 25% salary increment,” adds Sall.
But while local tech professionals are currently able to “push for aggressive upticks in compensation”, they should still be wary about taking jobs with overly inflated salaries, says Corera from Robert Walters.
“Once the tech talent bubble bursts as more Singaporeans get upskilled and more foreigners start getting their Employment Passes approved again, some technologists could be pricing themselves out of the market,” she says.
Singapore will see better times ahead
With the reopening of the economy and gradual easing of the border restrictions, as Singapore begins “living with Covid”, employment should record a stronger bounce-back — and there are already indicators of this acceleration in the current Q3 of the year.
Job creation in production, transportation and installation and maintenance was up 125%, 109%, and 89% in August respectively, when compared to February 2020.
Not only is employment returning — it is doing so at a pace that is favouring jobseekers who are likely soon to be inundated with options, after many months of desperate job search, in some cases.
“Competition for talent is increasing monthly and shows no sign of easing. Market dynamics for many occupations have shifted towards the jobseeker, potentially leading to greater choice for job seekers and higher salaries. As the economic recovery continues, we expect skill shortages to either develop or become exacerbated across a broader range of occupations that may create a more challenging hiring environment for businesses and recruiters.”
Official government data for the earlier quarter appears to be confirming this trend, as vacancies have — for the first time since March 2019 — outstripped the number of people looking for a job.
Source: Ministry of Manpower
With tens of thousands of foreigners gone — many losing relatively well-paying positions — while significant border restrictions remain in place to keep COVID-19 out, the number of good job opportunities for the locals may be highest in years.
That said, it’s no guarantee of employment if not enough people in Singapore are qualified to fill them. Of course, every year brings thousands of new graduates, for whom it may be a golden opportunity (particularly after more than a year of uncertainty about their careers).
But if there’s a significant mismatch between skills required for the position and the competences of candidates, Singapore may move from an employment crisis to a labour crunch, strangling businesses that are trying to get back on track as quickly as possible.