Talent hunt drives salary increase to 15% in Singapore
Upward pressure on salaries and attrition rates as employees seek ‘greener pastures’.
Ambition, a specialist recruitment group in Asia, on Monday announced the findings of its third quarter recruitment market report. Despite a more cautious approach due to the mixed economic data for the third quarter, Ambition has found that the intense search for suitable candidates has propelled employers to raise salaries or salary offers by up to 15% year to date. In addition, job numbers have climbed by an average of 67% year-on-year to their highest level since 2007, according to an Ambition report.
“Q3’s mixed economic data has created a greater sense of caution amongst the investment community as the specter of a double dip recession has hung over financial markets. However, this hasn’t dented the enthusiasm for hiring. The seasonal dip in August of this year broadly produces a slowing in recruitment decisions but September has seen a healthy bounce in activity with job numbers increasing and interview activity back to the 2010 trend. Even if modest growth continues, the jobs will certainly be chasing the talent and not the other way around,” comments Paul Endacott, managing director, Ambition Singapore.
Salary increases fuelling the market
The increase in hiring activity and a simultaneous dip in the availability of talent in Asia has led to an inevitable rise in salaries. Although the market has yet to see the 30%+ increments, as pre the global financial crisis, banks are offering an average increment of 12-15% and within commercial sector organisations, Ambition is observing an average 8-12% increment. As market sentiment continues to improve and the perceived likelihood of Asia going back into recession diminishes, further salary increases can be expected.
Hiring activity on the rise
With unemployment rates dropping in Singapore, confidence has been boosted which in turn has driven hiring sentiment and job numbers have climbed by an average of 67% versus a year ago to their highest level since 2007. As we approach the last quarter of 2010, Ambition expects some cooling off within the Banking and Financial Services sector as it becomes more difficult for employers to entice the best candidates to change jobs, in light of approaching bonuses payable early in 2011. Most banks remain reticent to offer ‘sign on’ bonuses or offer large fixed pay increases which will mean roles at this level will be increasingly difficult to hire for during Q4.
Away from banking, the real economy (also known as commerce & industry) suffers less from this challenge as bonuses are smaller and Ambition expects the fourth quarter to be another busy period of hiring, particularly in the area of Sales and Marketing, but also Ambition has noted a significant shift in upwards in the volume of mid to senior Finance positions being recruited.
Attrition levels increasing
Ambition has seen a considerable shift in candidate’s confidence in the market as the number of candidates passively looking at opportunities outside of their current employer continues to increase. This has meant that the market is seeing a much higher level of attrition and reiterates the importance of employers ensuring they are doing all they can to hold onto their best employees. There are some interesting months ahead to navigate, especially with the Singapore and Hong Kong property markets looking decidedly frothy but if even modest growth continues, Ambition anticipates 2011 to be another very challenging year for employers in recruiting and retaining talent.
More foreigners seeking Asia-based job opportunities
Candidate shortages have once again encouraged employers to consider talent from overseas and this year, there has been a 15% increase in the actual number of overseas candidates securing jobs in Asia which reinforces the issue of local skills shortages1. Whilst there remains an overriding preference to hire locally, Ambition has seen a 30% increase in applications from overseas in 2010 versus a year earlier. This is in part due to the challenging job markets in the US and Europe. However, only 1-2 % of candidates possess the prior regional experience which qualifies them for roles being recruited.
Difficulty in sourcing contract candidates increases
Inevitably with the increase of permanent roles being recruited in the market, this has certainly impacted the ability of employers to attract quality candidates to contract roles. Unfortunately Singapore does not have the transient workforce that markets like the UK and Australia enjoy, but also does not offer the perks that a contractor would enjoy in those markets.
Until Singapore employers offer a premium rate and benefits to attract candidates to contract roles, they will continue to be difficult to source for, particularly when so many new permanent roles are coming on the market. For the vast majority of candidates, taking a contract would be the last resort if a permanent role was not forthcoming.