Singapore now has one of its tightest labour markets in recent history. As the labour market rebounds from the pandemic, job vacancies hit a record high in the first quarter of 2022, with positions coming from growth sectors such as financial services, information and communications, public administration and education, and professional services.
Human capital is one of Singapore's most important resources, so it is particularly important for companies to attract and retain top talent. However, reports on the high demand for talent and companies adjusting salaries and beefing up benefits as part of talent retention efforts, underscore just how difficult hiring has become.
LinkedIn's recent Jobs on the Rise report shows that 7 out of 10 workers in Singapore are considering a new opportunity in 2022, as they seek career fulfilment and start to rethink their career goals.
Hiring to only get more challenging
Despite the ongoing labour market churn, the proportion of job vacancies that remain unfilled increased from 27 per cent in 2020 to 35 per cent last year, according to data from the Ministry of Manpower.
Employers are taking longer to fill positions, citing skill shortages and a mismatch in work experience as key reasons why they find it difficult to hire. They are looking for help to find and hire the right talent, and it is evident in the skyrocketing demand for recruiters or talent acquisition specialists.
New data from LinkedIn shows the changing demand for recruiters in Singapore since the pandemic. It reveals that demand for recruiters hit a new peak in January 2022, at nearly 5 times the 2019 benchmark.
This is an incredible jump considering that the demand for recruiters in May 2020 fell sharply to 29 per cent of pre-pandemic levels. While the demand for recruiters has slowly stabilised, it continues to remain high - at almost three times the 2019 benchmark as of April this year.
This high demand for recruiters is not unique to Singapore. LinkedIn's data also shows similar trends globally - as of April 2022, demand for recruiters was nearly four times higher than pre-pandemic levels in January 2019, and 11 times higher than May 2020 when the demand for recruiters dropped to 34 per cent of that same benchmark. This reflects not only the tight labour market, but also how challenging hiring has become for employers and hiring managers around the world.
Even though small and medium-sized enterprises (SMEs) make up 99 per cent of all enterprises here and account for 72 per cent of employment as of 2020, the fact remains that they still need to compete with multinationals and bigger, more renowned brands with deeper pockets when it comes to attracting and retaining talent. SMEs therefore need to adopt a more agile approach based on hiring for skills and potential, and provide better opportunities for growth and advancement.
Hunt for the right talent
SMEs will need to adapt their hiring strategies to today's modern workforce. It is recommended they adopt a skills-based or skills-first hiring approach. This means taking a more holistic lens by focusing on an applicant's skill sets and how they match or can be transferred to the role, as opposed to considering only traditional qualifiers like degrees, job titles, and years of experience.
Beyond skills, SMEs can also look at hiring for potential by identifying talent with good learning agility, growth mindset and willing to take on broader responsibilities as business transforms.
From LinkedIn's 2021 Future of Talent report, 60 per cent of companies in Singapore say that they are open to hiring employees from another industry if the skills they possess match the job requirements.
The report also found that more companies in Singapore prefer to hire candidates with technical skills (39 per cent) and transferable skills (31 per cent), over education (8 per cent) and minimum years of experience (12 per cent).
We are also seeing new skills-based trends on our platform. About 40 per cent of hiring professionals on LinkedIn are using skills data to find talent. Hiring managers are also 60 per cent more likely to make successful hires.
By seeing the value of skills, employers can identify and hire talent more efficiently, plug vital skill gaps in their operations, and prioritise roles that directly meet business needs.
To that end, in response to the fast-changing labour market, we have introduced new and enhanced tools with automated, skills-matching features which helps members to display their skills more prominently and allows employers and hiring professionals to efficiently identify the right candidates.
SMEs need to recognise the changing demands of today's employees and job seekers. The good news is employees are not just looking at pay when considering companies to join. They are now placing greater emphasis on benefits such as flexible working arrangements and job progression opportunities for faster progression and developing a wider range of skill sets, which many SMEs are well equipped to provide.
Companies that offer remote or flexible work options are already reaping the benefits. LinkedIn research shows that companies with these policies achieved an improvement in productivity levels (40 per cent), strengthened their brand image (36 per cent), and improved employee retention rates (36 per cent).
Finally, SMEs are typically more mindful of business costs of external hiring and find it hard-pressed to offer competitive benefits compared to larger companies. Instead of recruiting and training new hires, SMEs can consider developing and promoting from within internal candidates who are qualified for the role or looking for a change in job scope.
SMEs will be able to benefit from existing employees' knowledge of the company and its operations, and reduce the cost and time to onboard a new employee which could take up to three months. This is also a powerful retention strategy for companies to keep their best talent. According to data from our latest Workplace Learning Report, companies that excel at internal mobility are able to retain employees for an average of 5.4 years, nearly twice as long as companies that struggle with it, where the average retention span is 2.9 years.
As SMEs continue to compete for talent, today's labour market is only set to get more competitive. The onus is on business leaders to quickly adapt and re-evaluate their internal HR policies and processes, and improve their employee engagement and work arrangements - only then, can they attract and retain the best talent.
Frank Koo is Head of Asia, Talent & Learning Solutions at LinkedIn.