As businesses begin to recover from the pandemic, attracting and retaining talent will be among their top priorities. Although securing a highly competent workforce is the key to staying competitive, achieving this goal may be more difficult than it looks. With a tight labour market, evolving immigration policies, and increasing salary expectations, prospective employers face a number of important obstacles moving forward.
Low supply, high demand
As one of the industries most impacted by the pandemic, global manufacturing will face particularly complex challenges. Difficulties surrounding high raw material costs, slower deliveries, and other risks of supply chain instability are only compounded by a lack of competent and resourceful employees.
Border restrictions introduced during the pandemic have led to severe employee shortages for several countries that normally rely on foreign talent. Over the past year, Singaporean companies found themselves facing a shortfall of workers as non-national employees either returned to their home countries or entered high-demand, Covid-19 related jobs – such as swabbers or social distancing advocates.
As a result, the total number of employment passes held by foreign workers dropped by almost 20 percent over the past two years, going from 193,700 in 2019 to only 166,900 by June 2021. However, employment passes are now being pursued and offered to a greater degree, offering a window of hope for businesses that are prepared to capitalize on this opportunity.
Still, the problem of unfilled positions is likely to remain for some time to come. Deloitte reports an estimated worldwide shortfall of 2.1 million skilled manufacturing workers by 2030, with inadequate domestic capability to meet growing industry demands. Manufacturing companies also face exposure in India, China, Philippines, Vietnam, and Indonesia, where attrition rates remain high. [2] Greater staff turnover could drive costs upward in these manufacturing hubs, and potentially impact the sector on a global scale.
Indeed, the consequences of high turnover rates are likely to be felt beyond the manufacturing sector. From high-technology firms to professional services, the disruptions of the past two years could lead to a general loss in institutional knowledge across the board.
Shortened candidate ‘time on market’
The talent pool for workers has shrunk significantly in all sectors, due to what is being dubbed the ‘Mass Resignation’. Active applicants – who are usually most likely to respond quickly to recruiters – are often snapped up quickly by prospective employers who likewise take an active approach toward filling new job openings.
Meanwhile, semi-active and passive candidates will take more time and persistence to secure. The general desire for job security, as well as financial and non-financial benefits, has made currently-employed candidates reluctant to take up new opportunities. Therefore, prolonged and delicate recruitment processes are often needed to successfully recruit the most qualified people in the industry.
Salary increases across the globe
After salary freezes and job dislocations over the past two years, Connexus predicts an increase in what employees expect to earn in 2022. In fact, we are already seeing rising salaries as the labour pool tightens – particularly among professionals, technicians, and executives who have multiple offers and are even more in demand.
Our observations are in line with the findings of the recent Salary Budget Planning Survey by WTW. Their report predicts that 96 percent of companies around the world will increase salaries for employees in 2022 – with organisations in the top 15 economies predicted to increase pay by 4.3 percent, making for a higher actual salary increase than in 2021. Ranking at the top, France, Russia, India, and South Korea are expected to increase salaries by 0.5 percent more than the previous year. Meanwhile, Germany, Spain, China, Canada, and the UK are predicted to see a 3.4 percent rise in salaries – a leap from the 3.1 percent average increase last year.
In the UK, senior professionals can expect a pay rise of up to 25 percent in the first quarter of 2022 as the nation recovers financially. Experienced staff in the marketing, finance, and IT sectors will see a salary increase of 20,000 GBP or more. Pandemic-related demand for technology and healthcare could give employees in these industries a jump in pay of 15-20 percent.
APAC companies could experience similar trends.A study by ECA International[3] identifies the Asia-Pacific region as having some of the highest forecasted rates of actual salary increase, with the fastest growth based in Southeast Asia as local economies undergo a post-Covid resurgence.
Indonesia and Malaysia were among the countries most affected by Covid-19, yet are predicted to see some of the highest jumps in salary growth rates within the region. Meanwhile, Vietnam is currently on track to experience the fastest salary increases – not just within Asia-Pacific, but globally.
Vietnam’s expected salary increase outranks those expected in China, which the ECA International report ranks as third highest globally for pay rises. As demand grows around the world for consumer goods, China – the main producer of these goods – has seen larger import rates[4] [5] . As a result, Chinese shipping companies are also offering higher salaries and year-end bonuses – with some bonuses reaching 30 times the employee’s monthly pay.
Securing talent amongst fierce competition
During the recruitment process, getting the first offer right is essential – but meeting expected salary increases is only part of the challenge.
In 2022, workers will also prioritise non-financial gains when looking for jobs. Career progression will be an important draw, including opportunities for training, upskilling, and targeted performance incentives. Candidates will also appreciate flexibility and hybrid working structures, as part of better standards for their work-life balance.
Wellness and mental health support will likewise be important benefits to include when looking to attract new talent. In Singapore, international employers like AstraZeneca have introduced programmes to help their staff deal with issues like mental health and burnout; these types of initiatives will increasingly become the norm moving forward.
Securing the best people for your company requires a holistic approach to stay competitive amid the changing labour market. At Connexus, we stay on top of HR and recruitment trends at both an international and local level, going the extra mile to help our clients find and secure the right talent for their needs. To meet your personnel needs for 2022 and beyond, contact us today.
