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To say that Singapore’s workforce landscape is undergoing a massive shift is an understatement. It’s dynamic, fast-paced, and challenging. Companies looking to expand in Singapore or scale in the region must not be complacent in adapting to the landscape changes.
Current hiring landscape in Singapore
Here’s a bird’s eye view of the current hiring landscape in the Lion City.
Increase in hiring intentions despite overall decline
As of March 2024, the number of job vacancies in Singapore increased. At the same time, the number of unemployed people also increased.
For Q3 2024, Singapore’s Net Employment Outlook (NEO) is +20%—this is down four percentage points from Q2 and 14 percentage points year-over-year. NEO refers to the anticipated change in the number of people employed in a specific sector over a period of time.
So, what does this number mean? There is an intent to hire, but there are predictions that employment numbers will decrease. It’s a paradox; we’ll discuss this in more detail below.
Overview of ManpowerGroup Singapore’s employment outlook survey
The ManpowerGroup Singapore’s Employment Outlook Survey is a crucial resource for companies looking to scale or expand in the region. It contains insights such as employment outlook per industry, hiring outlook trends, and the impact of technology on the workforce. We’ve handpicked specific statistics here to discuss in this blog.
Importance of understanding workforce trends
Staying abreast of workforce trends is crucial for employers seeking to attract and retain top talent. This knowledge empowers them to craft detailed workforce strategies that adapt to evolving economic conditions. Employers and HR professionals must stay informed to make strategic workforce planning decisions.
Strategic workforce planning for 2024
Workforce planning involves forecasting future hiring needs, identifying skills gaps, and developing strategies to meet these needs efficiently. This process must include:
- Leveraging data and analytics to gain insights into workforce trends. Focusing on data helps businesses make informed decisions about hiring, training, and development. Data can reveal patterns and predict future needs, enabling companies to stay ahead of the curve.
- Aligning business goals with workforce needs. This alignment helps companies allocate resources effectively and prioritise key areas that drive growth and innovation.
- Improving talent acquisition and retention strategies: Attracting and retaining top talent is a primary goal of workforce planning. By understanding what employees value, businesses can create an environment that attracts and retains skilled professionals.
- Investing in skill development and upskilling: As technology and industry requirements evolve, so must the skills of the workforce. Companies that invest in their employees’ growth are attractive to ambitious and driven workers.
- Emphasising diversity and inclusion within the workforce. This can lead to more innovative solutions and a broader range of perspectives.
Adapting to evolving economic and technological conditions
Adapting to economic fluctuations and technological advancements is essential. Employers need to be agile to adjust hiring strategies in a dynamic market.
Here’s how companies can adapt:
- Embracing technological innovation
(Example: Adopting AI and automation can improve efficiency and allow employees to focus on more complex tasks.) - Developing flexible workforce strategies that can adapt to economic shifts.
(Example: Adopting flexible work arrangements, diversifying revenue streams, and balancing full-time and contingent workers.) - Fostering a culture of lifelong learning to encourage employees to update their skills and knowledge continuously.
(Example: training programs, workshops, and access to online learning resources.) - Preparing for multiple scenarios and potential risks to anticipate various economic and technological outcomes.
(Example: Developing contingency plans and risk mitigation strategies) - Building strong networks and collaborations with industry partners, educational institutions, and technology providers
Core workforce trends in Singapore 2024
Businesses planning to expand in Singapore must take note of these three major trends for 2024:
- Increasing hiring intentions
- Flexible working arrangements
- Sector-specific hiring trends
Let’s discuss each trend in detail.
Increasing hiring intentions
Survey insights
Despite outlooks of economic downturns, the ManpowerGroup report shared that 44% of employers in Singapore anticipate an increase in their hiring efforts. Additionally, more than half of Singaporean employers look forward to increasing their headcount due to AI over the next few years. This shows how dynamic and ever-changing Singapore’s businesses are.
While the overall outlook is positive, specific industries’ hiring activities vary:
- The industry with the highest hiring demand is transport, logistics, and automotive. Its NEO is a robust 47%—the strongest in Singapore and second globally.
- This is followed by healthcare and life sciences at 36%.
- Industrials and materials industry is at 31%.
- Financials and real estate industry is at 15%
Factors influencing hiring sentiment
Two major factors influence the hiring sentiment of businesses in Singapore and businesses planning to expand in the country:
1. Strategic business streamlining
Many companies focus on streamlining and optimising their operations to enhance efficiency, maximise productivity, and reduce costs. This streamlined business approach affects hiring in several ways:
- Operational efficiency involves adopting new technologies and systems that can automate routine tasks. This redirects resources towards higher-level initiatives, and companies may hire experts who can directly contribute to innovation and growth.
- Streamlined processes and workflows lead to cost savings, which can be reallocated to talent acquisition. Companies may prioritise hiring experts or invest in training and in-house promotions.
- Streamlining helps companies zero in on core competencies and priorities. When hiring, companies can build specialised teams or employ an additional workforce for specific departments instrumental in achieving the goals.
2. Offshoring and skills gap solutions
Employers may consider outsourcing certain functions or investing in reskilling initiatives to bridge skill gaps. This trend is expected to continue as companies seek to remain competitive globally. Here’s how offshoring helps provide solutions:
- Offshoring allows companies to tap into a global talent pool and work with experts who are not available geographically.
- Offshoring can also help reduce costs without sacrificing the quality of work. Highly skilled professionals in different regions have lower labour costs, which helps businesses save.
- Combining offshoring with other efforts to address skills gaps paves the way for companies to be agile and have the capacity to innovate continuously. Since they have access to offshore experts, they can tap into this expert pool as needed.
Flexible working arrangements
Rise of remote work
The rise of remote work has been one of the most significant shifts in the workforce landscape. Technological advancements have made it easier for employees to work from anywhere, providing flexibility and work-life balance.
Technological advancements facilitating remote work
Technological advancements, such as digital tools and platforms, have made the transition to remote work relatively smooth. These advancements fuel global communication and networking, and productivity has also increased.
Here are some examples of the significant advancements that have contributed to the rise of remote work:
- High-speed internet and connectivity are the backbone of remote work. They ensure that employees can connect to their company’s network, access cloud-based applications, and communicate effectively with colleagues and clients from any location.
- Cloud computing enables employees to store, access, and share data securely from anywhere. This accessibility ensures team members can collaborate on projects in real time, anywhere in the world.
- Collaboration tools like Slack, Microsoft Teams, and Zoom have revolutionised team communication. Instant messaging, video conferencing, and file sharing are now regularly part of daily remote work.
- Project management software like Asana, Trello, and Monday.com provide visibility into project progress and track performance, ensuring that teams stay organised and on track.
- Advanced cybersecurity measures, such as VPNs, encryption, and multi-factor authentication, protect sensitive data and ensure secure access to company resources.
Benefits and challenges of remote workforce
Remote work offers employees flexibility and work-life balance. However, this arrangement does have its own set of challenges.
Benefits of remote workforces:
- Increased flexibility to balance their work and personal lives
- Access toa global talent pool, attracting skilled professionals from diverse backgrounds.
- Reducedoverhead costs associated with maintaining physical office spaces and travel time.
- Higher productivity levels due to fewer distractions and the ability to create a personalised work environment.
- Reduced carbon emissions and environmental impact, as fewer employees commute and office energy consumption decreases.
Challenges of remote workforces:
- Maintaining team cohesion and fostering collaboration
- Communication barriers such as misunderstandings and delays.
- Feelings of isolation and loneliness for some employees
- Managing and evaluating employee performance remotely
- Setting clear expectations, regular check-ins, and performance metrics
- Blurred boundaries between work and personal life.
Impact of flexible work mandate
The Singapore government’s Flexible Work Arrangements (FWA) mandate encourages employers to offer flexible work options. This will likely influence hiring practices, with companies seeking talent adaptable to remote work models.
Many employers in Singapore have already adopted flexible work policies to attract and retain talent. This approach improves employee satisfaction, enhances productivity, and reduces turnover rates.
Additionally, balancing local and foreign talent integration is critical for businesses planning to expand or scale in Singapore. Companies must balance navigating regulatory requirements, leveraging the diverse skill sets that foreign talent brings, and prioritising local talent.
Sector-specific hiring trends
Transport, logistics, and automotive
The transport, logistics, and automotive sectors report the most robust employment outlook at 47%. This growth is fueled by eCommerce growth (logistics and transportation solutions), supply chain resilience, and adoption of advanced technologies.
Additionally, another huge factor in recent times includes green initiatives and investments in electric vehicles—which further highlights the industry’s shift towards sustainability:
- Investments in electric vehicles’ infrastructure, such as charging stations and battery technology, are driving the need for skilled engineers, technicians, and specialists in electric mobility.
- Additionally, the shift towards EVs requires training and upskilling the existing workforce to handle new technologies and maintenance requirements.
As a result, there is a growing demand for professionals with expertise in and a genuine passion for sustainability and environmental management.
Communication services sector
Despite overall positive hiring trends, the communication services sector has seen a declining employment outlook due to these factors:
- The communication services market is becoming saturated. There is limited space for growth, competition is intensifying, and cost-cutting measures are the priority.
- Technology is growing unprecedentedly and continuously reshaping and restructuring the communication landscape. While automation and consolidation of roles contribute to streamlined operations and efficiency, they also reduce the need for a large workforce.
- Economic fluctuations cause uncertainties, hiring freezes, layoffs, or retrenchments as businesses strive to maintain profit.
Financials and real estate
While the financial and real estate sectors may experience some hiring, the outlook is cautiously optimistic due to a potential economic slowdown. Still, the financial industry remains a cornerstone of Singapore’s economy. Despite global economic uncertainties, the sector continues to show strength.
The real estate market is subject to fluctuations influenced by interest rates, property demand, and government policies. While there is ongoing demand for real estate professionals, these market dynamics and conditions moderate the overall hiring outlook.
Expanding into wage and skills trends
Wage growth trends
Nominal and real wage growth in 2023
In 2023, Singapore experienced nominal and real wage growth:
- Nominal wages continued to grow in 2023 at 5.2%, a bit lower than 2022’s 6.5%.
- Real wages (after inflation/) also grew by 0.4% in 2023, close to the increase in 2022.
This rise reflects the ongoing recovery from the economic impacts of the COVID-19 pandemic and the increasing demand for skilled labour across various sectors. However, some sectors experienced higher wage increases than others, driven by demand for specific skills.
While all industries saw wage growth in 2023, the change across industries was overall lower than the last year. Meanwhile, above-average increases were reported in the following sectors:
- Financial services (7.6%)
- Information and communications (6.2%)
Below-average wage increases affected the following industries:
- Manufacturing (4%)
- Construction (4.2%)
Wage forecast for 2024
Nominal wages are projected to increase by approximately 3.5% to 4.0% in 2024. However, real wage growth, which accounts for inflation, may be more modest.
Employers will likely offer wage adjustments to retain talent and stay competitive, especially in high-demand technology, finance, and healthcare sectors.
Inflation also remains a critical factor influencing wage growth. Rising living costs and inflationary pressures may erode the purchasing power of nominal wage increases. Employers must consider the real wage impact when planning compensation strategies to maintain employees’ living standards.
Demand for digital and AI skills
Increasing importance of digital proficiency
Digital proficiency is more important than ever. Skills such as data analysis, cybersecurity, and AI are in high demand, driving companies to invest in training and educational initiatives.
The digital transformation sweeping across industries has intensified the demand for professionals with strong digital literacy. In terms of recruitment, companies seek individuals who can leverage these skills to optimise processes, improve decision-making, and build innovative solutions.
Rise of AI in the workforce
AI is no longer confined to science fiction; it’s rapidly integrating into everyday work environments. Check out these numbers:
From the ManpowerGroup Report:
- More than 50% of companies surveyed have already adopted AI, a 12% increase from last year.
- AI optimism varies by seniority. In general, senior leadership are more optimistic about what AI will bring.
- More than half of companies foresee an increase in headcount due to AI and machine learning in the next couple of years.
From Mercer’s Global Talent Trends report:
- 41% of executives in Asia believe that investing in AI will result in the most significant productivity boost
- While 58% of employees are excited to try new technologies, 31% feel overwhelmed by too many tools and platforms
This integration with AI and increasing dependence on digital tools bring both opportunities and challenges:
AI power users and job transformation
While some jobs may be automated, AI is more likely to create new roles focused on managing, collaborating, and overseeing AI systems. These “AI power users” will require a unique skillset combining technical expertise with human-centric skills like critical thinking, creativity, and problem-solving. It’s time to move away from the notion and fear of AI replacing humans—instead, let’s move towards owning the fact that AI tools are only as good as the people using them.
Reskilling and upskilling for AI integration
As AI continues to become part of a new normal, employees across all levels must continuously reskill and upskill to adapt to evolving job requirements. This requires a culture of lifelong learning within organisations.
Conclusion
Summary of crucial hiring and workforce trends
The Singaporean workforce landscape in 2024 is characterised by:
- Increase in hiring Intentions and sector-specific insights: While overall hiring intentions are cautiously optimistic, specific sectors like transport and logistics are experiencing a hiring boom.
- Flexible work arrangements and demand for digital skills: The rise of remote work models and the growing demand for digital and AI skills are reshaping recruitment strategies and talent needs.
The rise in hiring intentions and sector-specific variations highlight the dynamic nature of Singapore’s employment landscape. Companies must adapt their strategies to align with these trends. Meanwhile, the rise of flexible work arrangements and the increasing demand for digital skills emphasise the importance of agility in workforce planning.
Future considerations for employers and employees
There’s no other way to succeed in 2024—employers and employees must continuously adapt to the evolving workforce landscape. This includes staying informed about trends and being proactive in addressing challenges.
What does this mean for employers? They need to:
- Develop strategic workforce plans that consider future talent needs
- Invest in reskilling initiatives
- Create flexible work environments to attract and retain top talent.
On the other end of the spectrum, employees can future-proof their careers by:
- Continuously developing their digital and AI skills.
- Embracing a growth mindset and seeking opportunities to learn new skills.
- Adapting to potentially changing roles and responsibilities.
Here’s the kicker: simply staying informed about key hiring and workforce trends is not enough. Companies must follow through with their actions to succeed in this country’s business landscape. With our global expertise in helping companies maximise their workforce while staying compliant with regulations and policies. You can leave the administrative burden with us—we have decades of experience helping organisations worldwide. Leave it to us so you can focus on strategic and high-level decisions.
We’re excited and ready to help you navigate the complexities of the 2024 employment landscape in Singapore. Don’t hesitate to reach out to us today.
