Singapore Inc in the war for talent — Thorsten Barth and Abu Amin
FEB 16 — Continued global volatility may appear to be the order of the day, but the bullish confidence of Asia-Pacific companies in their own performances has manifested in a war for talent.
According to PricewaterhouseCoopers’ Global CEO Survey 2012, around 55 per cent of APAC chief executives surveyed anticipated increasing company headcount over the next three years — even as 70 per cent admit that hiring has become more difficult in the past 12 months.
This war for talent is beginning to have a quantifiable impact on companies in the region
Approximately 70 per cent of CEOs have had to cancel strategic initiatives in the last year due to talent shortage.
The same percentage of CEOs report that talent costs have risen beyond expectations.
These immediate pressures are worsened by a growing need for agile company leaders who can navigate a volatile environment and drive growth through a period of fast-paced change.
Having their skills in such high demand gives top performers greater mobility in an otherwise moribund employment market, causing companies to lose talent they can ill-afford to let go.
Given this unpromising scenario, Singapore — with its wide exposure to international markets and constant under-supply of human capital — is likely to be affected.
But while the situation certainly presents risks, it also holds opportunities that can unfold over the long-term, offering the country a way to upgrade itself into the truly innovative business environment it desires to be.
BRINGING BACK JOBS CREDIT?
Driving talent to key sectors is one of the most important concerns, and the Singapore government can take the lead by defining specific initiatives that target the 12 priority sectors identified in 2010.
These sectors, which include healthcare, construction, retail and electronics, are the main focus for the Ministry of Manpower’s Productivity Taskforce, and it makes sense that any incentives announced in this year’s Budget should be directed towards enhancing growth in these industries.
As an example, it was reported in The Business Times that small-to-medium enterprises are hoping for the return of the Jobs Credit Scheme (JCS) in this year’s Budget.
Introduced in 2009 and withdrawn in 2010, the initiative offered cash grants to employers to help preserve jobs in the wake of the 2008 crisis.
If it returns, the JCS could be more tightly focused on the 12 priority sectors, and align itself closely with other government initiatives aimed at driving growth, such as tax subsidies for training or productivity measures.
A bolder combination of training and cash grants could be borrowed from European nations, where the government subsidises employees’ salaries while the latter work fewer hours per week and undergo training to increase their employability.
REGIONAL EXPOSURE FOR LOCAL TALENT
Broadening the definition of training and development could also address the productivity imperative and the search for leadership.
Without the necessary overseas experience, few Singaporeans are able to take on regional leadership roles.
At the same time, certain sectors of the economy like manufacturing are experiencing a slowdown, leading to lower productivity levels.
With financial support from the government — such as lowered tax rates — companies can direct their local talent towards growing markets in the region.
The employees sent overseas benefit in terms of individual development, while the Singapore-based companies enjoy higher productivity and strengthen their regional outreach.
In addition, another’s loss can be Singapore’s gain.
Although companies’ instinctive tendency in hard times is to cut costs by reducing investments in development and human capital, Singapore-based enterprises can get ahead by enticing under-utilised or under-rewarded talent to its shores, as the West continues to grapple with instability and high unemployment.
When the long-anticipated upturn arrives, it will do so quickly — and companies that have been proactive in talent investment will find themselves ready to take advantage of it, while their competitors scramble to locate new hires with the right skill-sets.
Long-term growth for Singapore can only come from innovation, and the talent crisis presents a good opportunity to invest in the next generation of entrepreneurs.
In a volatile global environment, traditional industries such as financial services respond by scaling back their hiring of fresh graduates.
The 2008 downturn saw the government offering incentives to companies to continue hiring young talent, in the form of training subsidies and matching programmes.
These incentives continue to be useful, but they should run alongside a gamut of initiatives aimed at developing local entrepreneurship.
One suggestion is that the government offer some form of a safety net around failure by linking investors up with small companies, or providing partial investments and incentives that reduce the risk to entrepreneurs’ pockets.
At the same time, the cultural conversation regarding risk needs to be shifted, possibly through a campaign profiling leaders or business people who have taken risks, failed and bounced back.
Building a similar resilience in budding entrepreneurs is essential.
If cultural perceptions regarding risk and failure do not evolve, cohort after cohort of Singaporean students will continue to opt for traditional career routes over more innovative paths.
THE MIT INSPIRATION
On this note, co-ordination between the government, industries and higher education institutions should be enhanced, particularly in fields belonging to the 12 priority sectors such as clean energy and nursing.
For inspiration, Singapore can look to colleges such as the Massachusetts Institute of Technology (MIT), one of the first American institutions to collaborate with companies and government departments in creating successful ideas and products.
Even after graduation, mentorship programmes like the Global Accelerator Network — a partner of The Startup America Initiative — have worked successfully to translate students’ ideas into real-world start-ups.
Through such programmes, fresh graduates turned entrepreneurs gain valuable guidance in areas like marketing and investor communication.
While the Singapore Institute of Technology has taken the right step in bringing in partners like the Technological University of Munich, more can always be done to encourage the entrepreneurial spirit of younger generations.
If all these efforts are undertaken successfully, Singapore will make the next leap to become an innovative, entrepreneurial city — and a top draw for talent all over the world. — Today
* Thorsten Barth is a director and Abu Amin is a senior manager in the HR Consulting practice at PwC LLP Singapore.
* This is the personal opinion of the writers or publication. The Malaysian Insider does not endorse the view unless specified.