Talent
shortage and high attrition rates are now issues weighing on the minds of recruiters
and company chiefs in Asia, as companies expand more aggressively in Asian
growth markets.
Nearly
two-thirds of CEOs based in Asia told consultancy PwC in a survey they face a
'limited supply of candidates with the right skills'. Also, 47 per cent said
they lose their top people to competitors.
In a
report by boutique recruitment agency Ambition Group, about half of the 200
Singaporean executive respondents said attrition rates have risen in 2010 and
have raised the trend as a key concern.
The tight
talent pool comes at a time when companies are looking to expand in Asia. PwC
says that nine in 10 CEOs surveyed in their global CEO survey are expecting
their operations to grow in Asia, with a focus on China and India.
Gautam
Banerjee, executive chairman for PwC Singapore, notes that Singapore is also a
strong destination for businesses and talent.
Paul
Endacott, managing director of Ambition Group Singapore, said the recruitment pick-up
was at first driven by replacement hiring in Q1 through mid-Q2 2010. 'But by Q2
onwards, it was attrition that began to drive hiring and investment in key
areas that led to a candidate-short market.'
Seven in
10 executives in Ambition's report have seen people wooed by higher
remuneration packages from other firms. On average, Singaporean candidates are
offered pay packages 10 to 15 per cent higher than they used to earn and in
Hongkong, they can be as much as 20 per cent higher.
About 41
per cent say people leave because of a lack of career opportunities available.
'Attrition
is extremely costly to a company. Some research has shown that replacing a
person into a role can cost the company 150 per cent of the person's annual
salary,' says Mr Endacott.
About 62
per cent of Singaporean executives have to cast their eyes to overseas talent
because they are unable to find the right people here.
In
banking, Ambition CEO Guy Day finds recruiters tend to pick from other financial hubs like Hongkong, Japan,
Australia.
It gets
trickier when the roles get more niches, like in digital marketing, where it's rare to find someone
with experience in Asia. Typically, says Mr Day, such companies recruit from
the US, the UK or Australia.
Companies
are resorting to non-monetary means of shoring up talent erosion. About 65 per
cent of CEOs in PwC's survey say they are deploying key employees overseas.
Other
popular strategies include retaining workers past their retirement age and
tapping more female talent.
'If it's purely money, then it’s going to be
very challenging for companies to retain people,' notes Mr Endacott. 'However,
if it's career development that's the issue, companies can invest more in training, learning and do more to
improve work-life balance by offering flexible working arrangements.
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