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SMEs paying more for talent to drive growth
SMALL and medium-sized enterprises eager to fast-track their expansion are paying top dollar for the required talent, inspired by startups that have been able to grow their businesses rapidly with the aid of highly qualified hires.
In one instance, a Singapore company in a niche sector was prepared to fork out S$300,000 a year for an experienced head of human resources, about S$80,000 more than what most companies would pay. Another local firm in the technology space, hoping to bring in a senior finance professional with global corporate finance expertise, offered to pay 15 to 25 per cent more than the industry average of S$250,000 to S$350,000 per annum - plus an equity package.
Headhunters who work with SMEs in Singapore say it is an emerging trend.
"As startup companies are reliant on investor funding, they need to show results quickly. Thus, they do not mind paying more to hire top talent that will help propel their business forward," said Linda Teo, country manager at ManpowerGroup Singapore, whose SME clients are mostly those with regional presence and have been around for less than a decade.
"SMEs are also recognising that they need to expand overseas aggressively for future survival and without a strong team, their growth could potentially stall."
Clarence Quek, senior client solutions director at Randstad Singapore, said SMEs increasingly work with startups, global companies and investors, allowing them better access to good talent and capital funding.
"With the additional funding, SMEs are able to offer competitive salaries to secure highly-adaptable and self-driven talent who are capable of driving the business and deliver to the stakeholders," he said.
MJ Air Tech Asia Pacific, a supplier of air ventilation systems, is one SME that has taken to rewarding employees generously, with bonuses from six to 18 months to "very exceptional performers".
The longest end of the stick went to an experienced and "versatile" employee, who is an integral part of the company's sales team, said MJ Air Tech managing director Leong Cheng Wee.
But such remuneration isn't stated on job listings; it is only discussed during interviews, when Mr Leong has the chance to scrutinise candidates. For example, before he recruited the firm's general manager, there was much discussion about the latter's interest and job scope, which was wider than what the employee covered when working for a German multinational in China.
"For me, it's the commitment and scope of work he needs to do, how he can blend in and help the company to grow. There were KPIs (key performance indicators) in terms of operations," said Mr Leong.
While SMEs are now prepared to pay better, they are also cautious about who they hire, human resource consultants say.
"SMEs can't get the candidate selection wrong because there are limited positions for leadership," said Kartikey Singh, Korn Ferry Singapore's associate client partner. About a fifth of the consultancy's work comes from SMEs.
Hence, "they will be more cautious in screening and more upfront when it comes to discussing KPIs and pay," he said.
SMEs typically look for talented professionals with cross-functional capabilities given a less structured working environment compared to multinationals; they will also seek hands-on or energetic executives given the size of the business, according to the recruiters.
For some local companies, having shared goals is key.
Edy Tan, second-generation boss at environmental services firm Chye Thiam Maintenance, said: "Importantly, we need to share the same vision that this is the goal we're trying to achieve."
Other than that, "it has to have certain chemistry, such as whether they trust what I say or not, and whether I like his face," he added.
Senior executives who have left larger corporations for SMEs in recent times include:
- Teledirect Telecommerce's head of corporate development, Edward Goh, who quit Julius Baer as a senior advisor;
- Liaw Wei Shing, formerly a tax director at Temasek-owned Surbana Jurong and now a director at home-grown commodities supplier Citus Trading; and
- Yap Shih Chia, Chye Thiam's senior vice-president for corporate development and strategy, who has had stints with government agency International Enterprise Singapore (now Enterprise Singapore) and Stamford Land Corporation.
While generous compensation is a plus, it is sometimes not the sole motivator.
Mr Yap said: "I joined because I felt that the chemistry with the second gen (leaders) is right and I can make a difference and contribute to the journey and growth of the company."
The role is also interesting and challenging, said Mr Yap, who, aside from helping to chart Chye Thiam's strategy, also leads corporate finance, branding, sales and marketing activities within the firm.