What does it take to get the best employees in Singapore?

Companies are having to offer salary increases of 15-20% because of the skills shortage.

The Michael Page Salary and Employment Forecast reveals that 63% of employers believe a professional skills shortage will impact their business over the coming year. Of these respondents, 73% think the tight labour market will cause salaries to rise at a level exceeding the rate of inflation.

Over the last 12 months, hiring activity has been buoyant with a low unemployment rate and the demand for skills outweighing supply across all professional markets. Much of this positivity has been driven by multinational investment in Singapore as a regional hub for South East Asia. Business support functions like accounting, technology and marketing are being established in the country to service operations across the region and this is fuelling high levels of demand for professionals.

While the hiring outlook in Singapore remains positive, it is clear that the ongoing weakness of the US and European economies is impacting business confidence levels around the world. Singapore is not immune from these global forces, particularly in exposed sectors such as financial services. Although we have not yet seen any reduction in recruitment activity, the strength of the global recovery over coming months will strongly influence the hiring outlook for the new year.

Michael Page's annual employment survey reveals the vast majority of companies will be awarding their employees salary increases over the next 12 months. The average increase will be in the 4-6% range, although more will be offered to retain skill sets in higher demand.

While financial rewards will be on offer, some 80% of survey respondents will vary the level of salary increase according to performance, rather than offering a standard raise across the board. The same strategy will be in place for bonus payments, with 81% of employers saying bonuses would be awarded on a combination of individual, team and company performance. Corporates are closely aligning financial reward with performance in a targeted approach to retaining and developing their best people.

When it comes to recruiting new talent, companies are having to offer increases of 15-20% because of the skills shortage. Multinationals in Singapore are hiring professionals locally to develop into future leaders, as well as experienced professionals from overseas markets for some of the more senior roles. To be successful in attracting the best talent in a tight labour market, companies need to offer compelling employment propositions that go beyond an attractive salary package. The role and the employer brand are equally important, as well as the opportunities for career growth and the professional training and development to support it.

“Although the Singapore employment market is not immune from broader global conditions, we have not seen concerns over the US and European economies translate into reduced hiring activity. After 18 months of robust jobs growth companies are continuing to invest in their people and the employment outlook remains positive,” said Andrew Norton, Regional Managing Director of Michael Page International.