What lies ahead?

Sumathi V Selvaretnam 30 Jan 2013

Delayed recovery in the US, the Euro crisis, and a slowdown of growth in China present an uncertain world economy in 2013. Yet, Singapore appears to be keeping its head above the water, with employers predicting a largely positive outlook for their workforces.

Some 41% of respondents surveyed in a Singapore Employee Intentions Report by Michael Page, said the employment market would remain largely unchanged in 2012/2013 compared to the previous 12 months.

Hiring activity is expected to remain stable in 2013, says Dianna Low, Director, Michael Page Singapore. Companies across the fast-moving consumer goods, information technology and financial services sectors will be cautious about increasing headcount over the coming year, with a decrease in recruitment for newly created roles, she said. “However, employers will still continue to hire for replacement roles and do not have major plans to scale back any expansion plans. Indeed , they continue to want to grow in Asia, particularly across healthcare, professional services, oil and gas.”

Hotel industry player Royal Plaza on Scotts concurs. “Hiring plans will remain the same to cope with operational needs. Royal Plaza on Scotts is also taking the lead in improving productivity with multi-skilled employees,” says the hotel’s general manager, Patrick Fiat.

Salaries expected to increase

Singapore companies are budgeting an average salary increase of 4.5 percent in 2013, an increase over this year’s 4.3 percent. This is according to the 2012 Third Quarter Asia Pacific Budget Planning Survey by Towers Watson.

The report also found that as unemployment continues to remain flat at two percent, the job market in Singapore is expected to remain tight. This will continue to lend strong support to domestic wage growth moving forward, the report said.

The recent tightening of regulations on companies’ ability to hire foreign workers and rising employee medical costs may accelerate wage inflation, said Sean Paul Darilay, Global Data Services Manager, Towers Watson Singapore. “It is imperative that companies here look for new ways to improve workforce planning, invest in technology to enhance productivity, and put a greater focus on better managing and communicating employee benefits and rewards.”

According to the report, the outlook for the wider region is also favourable, with companies in both India and Vietnam budgeting double-digit salary increases of 12.0% in 2013, the highest within the region.

Shipping giant Maersk, for example, expects robust demand for talent in markets like Indonesia and Vietnam. “I expect reasonably strong wage growth in those areas,” says Pete Baker, HR Director, Asia Pacific, Maersk.

However, a report by ECA International suggests that wage increases could be eroded by inflation. The International Monetary Fund expects inflation in Singapore to be 4.3 percent next year. This means that the actual wage increase will be just 0.2 percent. “Once this inflation is taken into account, Singapore employees can anticipate the lowest real salary increase in the region and some of the lowest globally,” the report said.

Staying ahead of the competition

Raising efficiency and productivity appear to be at the top of the agenda for companies wanting to stay ahead.

Royal Plaza on Scotts, for example, is raising productivity by equipping its employees with multiple skills. Employees known as ‘multi-skilled butlers’ are able to perform a wide variety of tasks including greeting and seating guests, mixing simple cocktails, coordinating room service and providing concierge services upon request. In addition, the salary of butlers has increased from $1,200 to $1,400 per month. When these employees develop greater competencies, salaries can reach $1,700, says Fiat.

The use of technology can also make a sizeable difference. Passport scanners at Royal Plaza on Scotts enable employees to capture a guest’s details in a matter of seconds. Manual input used to take one to two minutes.

At Maersk, raising productivity involves migrating most transactional work to service centres in India and the Philippines. “This creates efficiency by ensuring that we are applying best practice consistently across our global processes, and additionally it allows the local country organisations to focus on meeting the needs of their customers,” Baker says.

Creating positive employee morale will be another challenge for employers next year as companies look to engage staff in their current roles, particularly as salary increments are minimal and the cost of living is rising, says Low.

Companies that want to stay ahead of the competition while managing costs must look into better employee engagement. “Employers need to appreciate the emotive needs of an employee and better understand their priorities,” says Miranda Lee, director of people and change management at KPMG in Singapore. This calls for a unique Employee Value Proposition centered around the employee as well non-monetary motivators such as career opportunities, job design and work environment, she adds.

Employees are looking for an emotional connection, says Fiat. At Royal Plaza on Scotts, this involves upgrading the hardware in the organisation so that employees feel more at home. The hotel has created a “Chillax Lounge”, which is equipped with a projector for employees to watch TV or movies while bonding with one another. There are also massage chairs and a live aquarium to help employees unwind and relax. “Our associates have tough jobs that require them to stand for hours. With the Chillax Lounge, they can now recharge in comfortable environment.”

There is an undeniable link between employee engagement and organisational performance in areas such as customer service, quality and organisation competitiveness, concludes Lee.


Key HR Challenges in 2013

•        Accelerating the development of local talent across the region

•        Equipping HR with functional skills such as business partnering, change management and strategic leadership

•        Retaining talent by building a strong emotional connection through the employer brand

•        Managing changes brought about by new foreign worker quotas


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