Hiring activity cools in tech, manufacturing amid broader caution by employers

HIRING demand has cooled in the once-hot sectors of tech and manufacturing, recruiters told The Business Times, as companies restructure and manufacturers face slowing demand for goods. But tech talent is still sought after in other industries.

Recent tech layoffs globally and in Singapore have made headlines. Demand for technology roles was high in the second and third quarters of the year, but has slowed in the final quarter, said Betul Genc, country manager for Singapore at Adecco.

“Digital transformation and growth escalated during the pandemic where tech firms scaled up extensively,” she noted. Now, facing high inflation and economic uncertainty, Big Tech firms are rethinking their strategies and laying off employees to restructure, she added.

Yet even as hiring in the tech sector weakens, demand for tech skills is expected to remain robust. Said Wong Wei Meng, chair of industry body SGTech: “Tech solutions, skills and talents are no longer confined to any single industry, but essential for every company that wants to participate in a rapidly evolving digital economy.”

“Some companies may need to resize their workforce or adjust their business strategies, but that doesn’t change the fundamental importance of tech for business transformation,” he added.

Within the tech sector, there is still strong demand in emerging areas such as greentech and medtech, said Jaya Dass, Asia-Pacific managing director of permanent recruitment at Randstad.

Tech firms are shifting their focus towards fast-growing areas such as cloud, data, cybersecurity, fintech, digital banking and software, noted Genc. But she added: “Although there will still be demand for technology professionals, this macro trend is expected to slow down and balance salary growth expectations.”

Beyond tech, Randstad has seen broader belt-tightening in the face of inflation and uncertainty, with firms taking a more “deliberate and well thought-out approach” towards recruitment, said Dass. “As long as inflation and geopolitical conditions persist, this more muted and technical recruitment game plan is expected to continue in the first half of 2023,” he added.

Manufacturing is another sector where once-strong demand has eased. In contrast to most sectors where job postings have risen or held steady in Q3, manufacturing positions fell 19 per cent compared to the H1 average on recruitment portal FastJobs Singapore, said general manager Huishan Lim. General production or operator positions on the portal have also fallen 23 per cent from the H1 average.

Singapore Manufacturing Federation (SMF) president Lennon Tan said that while some members have hiring budgets set aside, “they are adopting a wait-and-see approach to see if market conditions improve in the months ahead before they decide to hire, possibly influenced by talk of a possible economic downturn in the coming months”.

“That is not to say that hiring has stopped. There are SMF members still looking to fill vacancies in positions such as engineers, data analysts and developers,” he added.

In particular, the key electronics segment has seen weakening demand, with the global downcycle for semiconductors expected to persist into 2023. Nevertheless, the Singapore Semiconductor Industry Association said it has not heard of “any massive changes” in manpower within the industry. In fact, semiconductor firms are still doing “selective hiring” to meet the increasing demand for chips in the next few years, said a spokesperson.

Beyond these high-profile sectors, Randstad has seen hiring activity cool for middle management and support functions in the last quarter. “Companies are also holding back on plans to expand their headcount to invest in new business lines and models, at least for the near future.”

Another obvious decline is for frontline Covid-19 staff, after Singapore lifted most pandemic curbs. Adecco has seen a 20 to 30 per cent decline in admin and support services for pandemic-related roles. On the FastJobs portal, safe distancing ambassador and temperature screeners openings peaked in Q3 and Q4 of 2021 and have since fallen “close to zero”, with positions for vaccine operators also on a steady decline.

But conversely, demand is high for frontline roles in sectors which have benefited from reopening tailwinds, like aviation, hospitality and retail, said recruiters. FastJobs has seen a “marked increase” across sales, retail, marketing, human resource, and customer service roles.

Such demand will be bolstered by the upcoming festive season and the opening of new retail spaces, said Genc. As businesses look to raise brand awareness, gain market share and expand regionally, hiring has also ramped up for performance marketing, digital marketing, sales, data science and UX roles across sectors, she added.

Singapore National Employers Federation (SNEF) president Sim Gim Guan expects demand in tourism-related and consumer-facing sectors to continue to rise. Apart from hospitality and tourism, other sectors looking to hire include transport and logistics, as well as social and community services, according to an SNEF survey conducted from July to August.

But Sim cautioned that the pace of employment growth in 2022 is not sustainable, given that Singapore’s overall employment has exceeded pre-pandemic levels and the foreign workforce is also nearing pre-Covid levels.

“Therefore, employers have to redesign jobs to reduce reliance on manpower, hire and reskill job seekers who are from other sectors and seek to hire from alternative sources such as persons with disabilities and economically inactive persons,” he said.