HR forecast 2012

The past 12 months marked a buoyant period for Singapore businesses as they removed hiring freezes, reinstated bonuses and expanded their workforce. However, the current volatility in the global economy is raising questions on whether this positive outlook will extend into the new year.

While the European and US markets are facing rising unemployment, the Ministry of Manpower’s Q3 Employment Situation Report showed strong employment growth in Singapore, with the addition of 32,000 jobs. The unemployment rate of 2.0% is further evidence of Singapore’s tight labour market, says Karin Clarke, regional director for Singapore and Malaysia, Randstad.

Yet, there is no room for complacency. “Companies need to apply HR strategies that allow them to be flexible in retaining staff, should Singapore experience an economic slowdown resulting from challenging European or US economies,” Clarke says.

Stephen Tjoa, Partner, HR, KPMG Singapore, agrees. He says that it is important for HR to remain nimble and quick to respond to changes. “Our HR team works closely with our top leadership and business functions to address the rapidly changing business environment.” The company achieves this by monitoring key economic and performance indicators, and drawing up various contingency scenarios to better prepare itself for possible outcomes.

In such situations, outsourcing and streamlining some work functions can help HR play a more strategic role in the organisation. Brady Corporation, for example, is currently outsourcing its payroll functions across Asia. The company is also planning to hire a process improvement manager to increase the efficiency and effectiveness of its work processes, says its HR Director, Vincy Ng.

Challenges ahead

Most organisations that HRM spoke to agreed that talent attraction and retention is the biggest and most enduring challenge for HR. According to KPMG, there is an increasing demand for good talent and greater mobility of talent people across borders. “With more options available for good talent both locally and overseas, I expect our focus on hiring and retaining to remain in the near future,” Tjoa says.

Companies with offices in the Asia region are also feeling the strain. For Brady Corporation, the retention of top talent in China remains a huge challenge as demand continues to outstrip supply, says Ng.

Economies in many parts of the region are also gaining strength and governments are coming under pressure to raise wages and benefits for the population, observes Jan Smits, CEO, InterContinental Hotels Group (IHG). “The effects of labour legislation and mandatory wage increases will be one of the key HR challenges.” To tackle these challenges, IHG will be placing greater focus on localisation programmes and internal succession planning.

In Singapore, as the entry criteria for expat and foreign workers tighten, Randstad predicts companies will face challenges filling critical roles. “Whether that be leadership and professional specialist roles, or those in the lower income high-volume bracket. The war for talent looks set to be extreme for the foreseeable future,” Clarke says.

Training and development sometimes take a backseat during a period of economic uncertainty. But this should not be the case, says Clarke. “Companies looking to retain top talent and to compete effectively in a tight labour market must employ sophisticated human capital strategies that include fast-tracking leadership development and up-skilling of the current workforce.”

Engaging Gen Y and beyond

Talent attraction and retention among the younger generation of workers can be particularly challenging, say companies. “Gaining insights to the mindset and motivation of the next generation is critical, especially in emerging markets with a younger population, such as India and the Middle East,” Smits says. His organisation plans to leverage on new technologies and social media to reach out to this group of employees.

IHG represents a growing number of employers who are realising the possibilities offered by social media. In fact, a survey by Jobvite.com revealed that nearly two-thirds of employers have achieved successful hires through social networks. Some 55% of them also plan to increase their budgets for social recruiting in 2012.

“The data show that recruiting departments, like marketing departments, are reaching and engaging their targets in multiple social networks,” says Dan Finnigan, President and Chief Executive Officer of Jobvite. “The fastest moving companies increasingly use the richness of profiles in LinkedIn, the power of online connections in Facebook, and the instant reach of Twitter to develop valuable talent pools and make new hires.”