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Salaries for highly-skilled Singapore workers set to surge due to global talent crunch: study
A HIGHLY-SKILLED employee in the manufacturing, financial services or the TMT (technology, media and telecommunications) industry in Singapore can expect to be paid an extra US$29,100 (S$39,500) per year by 2030 as talent shortages loom, according to a new study by consulting firm Korn Ferry.
This means Singapore companies will face the second-highest average wage premium out of 20 major economies examined in Korn Ferry’s Salary Surge study, putting profits under pressure .
The term "wage premium" refers to the additional salary employers will need to pay above normal inflation increases to secure the right talent.
Hong Kong tops the table with an average wage premium of US$40,500 annually, while Australia takes third place with US$28,600 per worker per year. Globally, the average pay premium for skilled workers in Asia Pacific could be more than US$14,700, the study showed.
"Although major economies can expect the highest wage premiums, smaller markets with limited workforces will feel the most pressure. By 2030, Singapore and Hong Kong — small economies with important financial centres — are forecasted to face a wage premium equivalent to about 10 per cent of their respective 2017 GDPs (according to IMF estimates)," Korn Ferry noted.
Said Ben Frost, VP and general manager of reward products at Korn Ferry: "The talent shortage will force companies to think differently about career progression. If you don’t promote a highly skilled employee, a competitor probably will, so organisations may be pushed to award promotions earlier than they otherwise would."
The estimated talent deficit of 85.2 million workers across the 20 major economies is expected to add some US$2.5 trillion to company payrolls each year, Korn Ferry said.
Said Dhritiman Chakrabarti, Korn Ferry's Apac head of rewards and benefits: "The new era of work is one of scarcity in abundance: there are plenty of people, but not enough with the skills their organisations will need to survive."
However, Mr Chakrabarti also noted that competing for limited talent is unsustainable in the long run, and that companies should focus on engaging and reskilling current workers.
"In tomorrow’s world of work, the employees who will succeed won't necessarily be the people with the highest level of academic achievement. Instead, they will be the ones who are adaptable and willing to learn, with enough flexibility to handle rapidly shifting working environments and less hierarchical structures," he said.
"Companies need to identify the talent of tomorrow and help them achieve their potential," he added.
To conduct its study, Korn Ferry projected the impact talent shortages will have on wage bills by mapping its proprietary global pay data against the skilled labor shortage estimates across the same 20 economies at the same milestone dates.
It focused on the three knowledge-intensive industries identified, as it sees them as critical drivers of global economic growth.