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Solving the talent conundrum
MOST businesses in Singapore face the challenge of finding the right talent but small and medium enterprises (SMEs) seem to feel the pinch more acutely.
Despite government support, nearly half of the SMEs polled by DBS in February said they continue to grapple with hiring the right people, while slightly more than a quarter of them had challenges retaining employees.
The Business Times talks to three industry leaders to find out what drives the talent crunch and how to approach the issue.
- Yang Li Lian, head of recruitment services, RSM Singapore
- Kwan Chong Wah, chief executive officer and co-founder, Acorn Marketing and Research Consultants
- Chew Mok Lee, assistant chief executive officer, ICT and media and digitalisation, enterprise services and new industries, Enterprise Singapore
- Moderator: Lynette Tan, journalist, The Business Times
Manpower issues continue to be one of SMEs' main pain points. What are the key skills in demand?
Kwan Chong Wah: Firstly, we need to recognise the diversity among SMEs - their manpower needs are not the same. Some SMEs merely need "hands on deck".
Others need deep domain as well as company-specific skills. These require an extended time on the job to acquire a specific know-how beyond what is taught in schools. For them, several factors are in collusion, and a vicious cycle is in place.
Yang Li Lian: Multi-skilled talents who are nimble and able to navigate in SMEs are often an asset. Attracting such people is a challenge, especially when business owners expect them to adapt quickly to the SME environment or culture.
Many times, we have SME owners who prefer job seekers from SME environments. Our advice to them is be open to diversity. At the same time, they should also proactively develop their people internally so that the internal workforce stays relevant to industry trends.
Chew Mok Lee: For our workforce of the future to stay relevant to the evolving environment, they need to build adaptive skills. By this, we are looking at being analytical and creative in thinking and the ability to tackle issues of the new economy.
Companies also value competence in negotiation and collaboration to foster win-win partnerships. As businesses become interconnected, having emotional and social intelligence helps to navigate different roles at work.
Second, technical skills are important. These are required to tackle the digital economy. Data analytics skills will help businesses translate data into actionable outcomes for further growth. Cybersecurity awareness and know-how are also critical as enterprises operate their businesses in an online environment.
Some say SMEs are not attracting talent because of lower pay and brand recognition compared to large corporations. What are the main factors hindering SMEs?
Chong Wah: Trust SMEs to be pragmatic. If their business bottomlines warrant it, they will pay whatever it takes to bring in the profits. The reason they are not paying is because the sums do not add up.
New hires and fresh graduates need on-the-job training for an extended period - anything from two to three years - before they can be net contributors to the bottomline.
These days, those who can't land a job that pays their expected salaries would rather join the gig economy, while waiting for a job that will.
That further delays their acquisition of domain and company-specific skills, for which SMEs are willing to pay. There is a sizeable gap between what SMEs are willing to pay, and what job applicants are willing to accept.
Another factor is the smaller pool of new job entrants, that is being reduced further by job seekers who desire to be in startups or be their own boss instead. They also miss out on those critical years of on-the-job training.
Li Lian: Pay can be a factor. It can also be due to an expectation alignment gap. We know of SMEs who are willing to pay for the right talents if they prove themselves and meet expectations. They do not want to risk hiring a highly-paid talent who may not live up to expectations.
On the other hand, we have also seen job seekers who are willing to accept "SME pay" if they believe the SMEs can bring about the experiences they desire, for example, forward- looking businesses with purposes that they can connect with, and career growth opportunities locally and internationally. Being part of the growth journey excites them more than job security.
The other factor hindering SMEs is how to strike a balance between growing their people and growing the business. They are reluctant to invest in people development unless the potential benefit of these hires are clear.
Mok Lee: One challenge for SMEs is in positioning themselves as employers of choice. By highlighting their own unique value proposition and brand story, it can help raise brand affinity. They, too, need to show how they offer a holistic career growth and development to individuals.
Second, it's about putting in a structured HR process, starting from recruitment. Such processes can be easily done using the toolkits and templates readily available on the HR portal (www.hrportal.sg) or through capability upgrading projects which our Enterprise Development Grant supports.
Third, SMEs are dealing with the pressures of daily operations. Employers need to acknowledge the correlation between human capital and organisational productivity, and commit to investing in their workforce for long-term benefits.
What are some best practices for attracting talent by SMEs?
Chong Wah: Attracting talent is not more important than training and retaining talent. SMEs don't need to hire the top talents of every cohort. They can make do with the above-average talent, train them well in their domain and company-specific skills, and then reward them accordingly.
Li Lian: The question to ask ourselves is: how can we stay competitive as an employer in today's war for talents?
SMEs can make an effort to create memorable "employee experiences", and adopt an active learning and development programme with ongoing improvement in job functions, adopting technologies where possible.
Look into the work environment too. Little changes to the staff pantry or a monthly treat can work wonders. Consider flexi-work arrangements too, if they make business sense.
Mok Lee: Talents want to be inspired by the vision of the employer and the business potential they see. They want to know they can learn, grow and build new capabilities alongside the company.
Companies need to have clarity of vision and the ability to articulate it such that it excites and attract the right candidate.
A learning organisation is often attractive to talents and having a robust training and development function is key. To build this, SMEs can tap on programmes by Workforce Singapore or SkillsFuture for workers' training as well as put in place a system to identify training and development needs.
Partner the institutes of higher learning to source for a future pool of talent. Profile job opportunities at career fairs, or offer internship programmes to get students excited about joining your company. Our Global Ready Talent programme provides support for both local and overseas internships.
Are SMEs doing enough to develop the potential of existing staff?
Chong Wah: It's easier said than done. Every growing or successful SME would have some trade secrets which they hold very close to their chest.
If they do not think a candidate would stay, they would be very reluctant to pass on those trade secrets. And once they pass on their trade secrets, what is there to stop the candidate from leaving and starting on their own?
Therefore, SMEs need to put in place a very comprehensive training programme, and a very compelling incentive scheme. This could include share ownership, if one is a high value contributor.
Li Lian: We do see more efforts by SMEs to develop the potential of their existing staff, while others are catching up as they realise that if they do not change, they face losing existing staff or worse, being unable to attract new talents.
Mok Lee: We see SMEs recognising the crucial need to be proactive about investing in their people's development. Some have engaged experienced learning and development experts as mentors to help their staff improve on-the-job training and be better supervisors.
Through our work with companies on programmes and projects, we see some SMEs seeking ways to automate mundane work, redesign jobs and reskill existing staff to take on more meaningful tasks.
For example, Ngee Soon Jewellery's adoption of radio-frequency identification (RFID) reduced manual inventory work for their staff, and allowed them to redesign jobs to focus on sales.