Laid-off tech workers still in demand elsewhere – but may not be in jobs they prefer

SINGAPORE’S employers are still hiring for tech roles, taking the chance to snag workers made redundant in the rounds of high-profile layoffs since 2022, say recruiters and economists.

But affected workers may not be able to match their previous jobs. The layoffs represent a market correction, after the tech hiring boom during the Covid-era work-from-home phase, said the observers.

Most retrenched tech employees in Singapore landed new jobs within three to six months, said Ravi Nippani, associate partner of human capital solutions at professional services firm Aon.

“Asia-headquartered companies that have been embarking on international expansion, such as the Chinese-headquartered companies, are still hiring,” he told The Business Times.

He named banks, professional services firms and the public sector as employers that still have tech openings – including in cybersecurity roles, which are typically in demand.

Residents retrenched in the information and communications sector had “good re-entry prospects” in 2022, the Ministry of Manpower said in a report.

Some 72.8 per cent of such workers re-entered employment within six months, higher than the overall annual re-entry rate of 68.9 per cent.

However, 64.1 per cent of those who landed new jobs did so in a different industry.

Big Tech layoffs may have freed up talent for other employers, said Nippani: “In general, talent demand has far outstripped talent supply, and hence these redundancies should actually bring some comfort to short-staffed organisations.”

Laid-off workers can switch from the tech sector to tech-related positions in other sectors, said OCBC chief economist Selena Ling. These include areas such as data analytics and artificial intelligence in consultancies or large corporate organisations.

“The tech layoffs may be easily absorbed due to the digital transformation efforts for companies, especially small and medium-sized enterprises (SMEs),” she added.

Down the ladder

However, once sky-high tech salaries are moderating. Said Nippani: “It’s a good time for organisations in these industries to tap the advanced skill sets of these employees without having to pay the large premiums witnessed during 2020 and 2021.”

Labour economist Walter Theseira, associate professor of economics at the Singapore University of Social Sciences, warned that redundant tech workers “can stay in the (infocomm technology) sector or roles, but they will have to take less preferred jobs”.

Headline-making retrenchments were mainly by multinational corporations (MNCs) such as Yahoo, Facebook parent Meta, as well as Microsoft and its subsidiaries. “Since it is these large tech MNCs who are now leading headcount reductions, I expect downward job mobility as a result, to lower-paying jobs in the tech sector in smaller firms,” Prof Theseira said.

Daljit Sall, general manager of technology at recruitment firm Randstad, noted that companies have become more conservative in hiring.

For instance, they may prefer contract staff for specific projects. They are also hiring “to fill specific roles and meet new business demands, rather than growing their teams for more open-ended innovation and growth projects”, he said.

But workers may not have adjusted to these market realities. Sall observed that “tech workers… are currently being more selective about working with SMEs and startups, and prioritising jobs with greater perceived security”.

“In today’s challenging macroeconomic environment, tech talents will need to be flexible with their expectations of pay and benefits if they are looking for new roles at MNCs,” he added.

Unfilled gaps

At the same time, lucrative packages are still being dangled for technical skills that are thin on the ground, as a long-running talent crunch persists.

Wong Wai Meng, chair of industry group SGTech, noted that “technical roles like product managers, (user interface) developers, cybersecurity experts and cloud architects will continue to be highly sought after” as industries press on with digital transformation.

Growing investment in artificial intelligence is also expected to drive demand for professionals with skills in machine learning, deep learning, and natural language processing.

Said Wong: “Despite offering attractive packages, many companies still struggle to fill job roles requiring specific expertise. Job roles like dev-ops (development operations) professionals, cybersecurity specialists, and data scientists are particularly short in supply.”

Rather than fight over the limited pool of top talent, companies may choose to move lower-tier hires up the ranks. Said Randstad’s Sall: “For example, some companies are hiring junior engineers and upskilling them into cyber-related security roles, or even hiring tech talent for emerging roles such as prompt engineering.”

To tackle mismatches, Wong proposed “skills-based hiring” instead of the traditional model under which pay rises with seniority or rank.

Having “flexible salary ranges based on the skills and experience required” will let employers “offer a fair salary based on the candidate’s qualifications rather than a strict salary range that may not be appropriate for every candidate”, he said.

Besides improving the recruitment process, such a wage model might also motivate employees to pursue skills upgrading throughout their career, said SG Tech.

While the recent layoffs may be “a slight correction to the over-hiring” earlier in the pandemic, as Sall put it, Singapore’s policymakers seem upbeat about longer-term growth.

Under an updated industry transformation map launched on May 5, “80,000 well-paying jobs” are expected to be created in information and communications by 2025.

Prof Theseira said: “Perhaps the broader point here is that the tech sector is certainly prominent, pays well, and attracts outsized attention, but the top global firms which are leading retrenchments don’t contribute to the bulk of employment.”