Unemployment looms in Q3

Only over a third or 34.7% of employers plan to increase headcount, says survey.

Hiring expectations in Singapore have dipped this quarter as more employers adopt a ‘wait and see’ approach; just over a third (34.7%) of respondents plan to increase headcount while more than half (57.8%) will maintain it for Q3 2012, according to the latest Hudson Report: Employment Trends published today.

These figures represent a decline on the previous three months - positive hiring intentions were 42.4% in Q2. The survey shows a slight increase - from 6.2% in Q2 – to 7.4% of employers planning to cut staff numbers in the coming quarter.

Hudson (NASDAQ: HSON), a global talent solutions company, surveyed 567 Singapore employers in June for the for the July-September period.

Andrew Tomich, Executive General Manager of Hudson Singapore, said the survey findings reflect the current economic climate: “The Singaporean economy is showing a slowdown as most employers are looking for greater stability in the U.S. and Europe before committing to significant expansion of their workforces. Current market sentiment is best described as cautious so it’s crucial for companies to invest in people who can help them navigate these turbulent times.”

A cautious climate

Just over a fifth (22.9%) of employers say they feel ‘optimistic’ about the Singaporean economy. Almost three quarters (70.7%) report feeling ‘cautious’ or ‘uncertain’ and about one in 20 (6.4%) feel ‘negative’ or ‘pessimistic’.

Of those feeling cautious, more than three quarters (78.0%) say this has had a tangible effect on their hiring behaviour including adopting more stringent headcount approval processes (66.6%), implementing hiring freezes for non-core roles (38.4%) and slowing down decisions about new hires (36.4%).

Mr Tomich says more strategic measures are needed to maximise return on investment in human capital. “Creating competitive advantage is about making better hiring decisions most of the time. We are definitely seeing more stringent and protracted recruitment processes to justify hiring, and an increasing need to demonstrate how a new hire will deliver a return on investment. Global organisations are seeking senior executive approvals and multiple interviews, but the increased time spent making decisions may not automatically translate into better hiring outcomes,” he said.

Mr Tomich adds that many employers could improve the rigour of their recruitment processes. “Some employers are starting to assess candidates to ensure the right fit but much more can be done to reduce risk and help ensure high performance. Companies should focus less on traditional methods that prioritise technical qualifications and experience and instead look at assessments that measure candidates’ motivational and behavioural attributes,” he said.

Most confident industries

Consumer is the most positive sector; almost half (42.9%) of employers plan to increase headcount over the next quarter. Hiring appetite is strongest for people with consumer electronics and retail experience.

Manufacturing & Industrial is also positive; 40.0% of employers expect to add to their teams in the next three months. Healthcare & Life Sciences companies are recruiting too, although at a lower level than in Q2; 39.5% of employers in this sector say they will boost headcount this quarter, a drop of 17.2pp since April.

Less confident industries

Fewer than one in 10 employers (7.4%) plan to reduce staff numbers over the next three months. This figure represents a slight increase on the last quarter (by 1.2pp) but remains low.

Banking & Financial Services firms are most likely to decrease headcount. Around one in 10 (11.6%) say they expect to do this. As challenging operating conditions continue, the majority of banks in Singapore are limiting themselves to critical hires. Demand is greatest for risk management and compliance professionals plus essential back office operational roles.

Other sectors report only single digit intentions to decrease staff numbers: 8.0% of IT&T employers say they intend to do this, followed by 6.3% of consumer enterprises.