Singapore is experiencing high levels of wage pressure in high-skill industries and high-skill occupations, according to the 2016 Hays Global Skills Index released today which assesses the efficiency of skilled labour markets in 33 countries.
The Hays Global Skills Index, produced in collaboration with Oxford Economics, gives Singapore an overall score of 4.7 unchanged since 2015. Seven indicators, or points of potential pressure, make up the ranking and each received a score out of 10. A score close to 0 indicates little to no pressure, while a score close to 10 shows severe pressure.
“Economic growth in Singapore has slowed down in recent years which has led to an easing in overall labour market conditions. However Singapore remains a popular choice as a strategic regional hub for multinational corporations looking to expand in Asia and businesses continue to display positive albeit more cautious hiring sentiments,” says Lynne Roeder, Managing Director of Hays in Singapore.
The Index shows that pressure on Singapore’s labour market comes from three particular indicators, the first of which is ‘wage pressure in high-skill industries’. This measures the rate at which wages in high-skill industries outpace those in low-skill industries and tops the list of Singapore’s pressure points at a score of 8.4 for the second year in a row.
“This score supports what we’re seeing on the ground, that employers in high-skill sectors, such as life sciences and technology, are facing specific skill shortages and strong competition for top talent,” Lynne explains.
Additional pressure comes from ‘wage pressure in high-skill occupations’ for which Singapore received a score of 6.4, an increment of 0.5 since 2015. According to Lynne, “As the candidate pool tightens further in Singapore, some of the highly-skilled occupations facing wage pressures include the likes of engineers, IT and compliance and risk professionals.
“Just as we see in high-skill industries, the high demand but short supply of talent for highly-skilled occupations is leading to wage pressure for suitable candidates.”
Further supporting this is ‘talent mismatch’, for which Singapore received a score of 6.1. This indicates that available talent often does not possess the skills employers want, most often than not in the above-mentioned high-skilled industries and occupations.
Finally, Singapore received a score of 5.5 for ‘labour market participation’, suggesting healthy utilisation of the available workforce. There is however potential to improve this score, as seen by various government measures to engage retired professionals and stay-at-home mothers for example. “We see more and more companies offering flexible benefits such as flexi-hours, work-from-home initiatives to innovative benefits, in an attempt to attract and retain more talent. Such initiatives have the potential to attract and re-introduce experienced professionals back into the workforce,” Lynne comments.
Despite tightening labour conditions, the ‘overall wage pressure’ score eased in 2016, falling from 5.8 to 5.0 which is a reflection of a softer economy with employers being more cautious in awarding premium salaries. As Lynne explains, “Fewer job opportunities in Singapore have influenced candidates to re-evaluate salary expectations when assessing the suitability of a job offer. This has resulted in lower wage pressures on the whole.”
The Hays Global Skills Index scored Singapore extremely positively for the final two indicators. Our education system is extremely well equipped to meet future talent needs (scored 0.7 for ‘education flexibility’), indicating continuous relevancy of education and professional qualifications provided in Singapore. Government legislation and support also makes hiring easy and flexible (scored 0.6 for ‘labour market flexibility’). These are both positives for our labour market.
About the Hays Global Skills Index
The Hays Global Skills Index assesses the efficiency of the skilled labour market in 33 countries, or its ability to supply skilled labour. It is a composite figure based on seven indicators, each with their own score. Three indicators explore the supply of talent, namely education flexibility, labour market participation and labour market flexibility. One looks at talent mismatch. The final three are wage pressure indicators, looking at overall wage pressure, wage pressure in high-skill industries and wage pressure in high-skill occupations.
A score of 5.0 indicates a balanced picture for labour markets, a score close to 0 indicates less intense competition for vacancies, and a score close to 10 shows severe difficulty in finding skills.
The Hays Global Skills Index can be viewed at www.hays-index.com.
Hays is located in Singapore at Level 27, UOB Plaza 2, 80 Raffles Place, Singapore.
Hays, the world’s leading recruiting experts in qualified, professional and skilled people.
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For further information please contact Kathy Lou – Head of Marketing, Asia on +86 21 2322 9653 or [email protected]
About Hays
Hays plc (the "Group") is a leading global professional recruiting group. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. As at 30 June 2016 the Group employed 9,214 staff operating from 252 offices in 33 countries across 20 specialisms. For the year ended 30 June 2016:
– the Group reported net fees of £810.3 million and operating profit (pre-exceptional items) of £181 million;
– the Group placed around 67,000 candidates into permanent jobs and around 220,000 people into temporary assignments;
– 22% of Group net fees were generated in Asia Pacific, 45% in Continental Europe & RoW (CERoW) and 33% in the United Kingdom & Ireland;
– the temporary placement business represented 58% of net fees and the permanent placement business represented 42% of net fees;
– Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada, Colombia, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA.