Singapore wage pressures are mounting

Wage pressures are mounting, especially in high-skill industries and high-skill occupations in Singapore.

This is one of the findings of the Hays Global Skills Index –a major report published by Hays in collaboration with Oxford Economics.

Overall, Singapore scored 5.1 on par with the Index average. The Hays Global Skills Index creates a score for each country between 0 and 10 on the constraints and frictions being faced by its market for skilled labour.

This is calculated through an analysis of seven components, covering areas such as education levels, labour market flexibility, and high-skill wage pressures.

A score above 5.0 suggests employers are witnessing difficulties finding the key skills they need and are suffering market friction, while a score below 5.0 indicates a lax labour market with no major constraints on the supply of skilled labour.

Within these overall scores, however, the scores attributed to each of the seven components can vary significantly, highlighting the different dynamics and pressures faced.

The Index shows that each country surveyed faces specific issues in its skilled labour force. 16 of the 27 countries are currently suffering some degree of labour market tightness, despite the global economic slowdown – an economic paradox.

According to the Index, Singapore is witnessing wage inflation in high-skill occupations but has already implemented far-reaching immigration systems to respond to this pressure.

Singapore has a relatively young population and has high levels of education and labour market flexibility that has enabled employers to source candidates from overseas, the report says.

The common usage of the English language has also helped widen the pool for talent for sectors such as financial services.

However, strong levels of economic growth have fuelled demand for staff which has led to high levels of shortages in specific industries and occupations.

To combat the mismatch of skills availability and demand around the world, the Hays report proposes a long-term three-point action plan for policymakers.

First, governments should focus on the skills their economies lack and take appropriate measures to attract the relevant people through targeted immigration. This would in many cases require an overhaul of existing work visa arrangements.

Second, employers should be offered fiscal incentives to increase their provision of relevant training.

Third, governments should work with employers and educational authorities to implement a series of measures and incentives to persuade young people to acquire the skills that are most needed on both a country and international level.

To see the full Hays Global Skills Index and report, please go to www.hays-index.com/.