Disclaimer: Opinions expressed below belong solely to the author.
While many are looking to 2023 with some anxiety, due to the fears of a recession that might be triggered by excessively restrictive monetary policies which have been enacted to fight inflation around the world, the labour market in Singapore should remain good to local employees.
Talent shortage
While unemployment is down to pre-pandemic levels, as many as 84 per cent of local employers report problems with finding the right talent — one of the highest ratios in the world, according to Talent Shortage 2022 report by ManpowerGroup, based on a survey of 40,000 companies across 40 selected economies.
In addition, global average remains at historic highs of 75 per cent — up from 54 per cent before the pandemic and a prevailing range of 30 to 40 per cent in the decade prior.
Here are the figures for Singapore:
This is seemingly good news for employees everywhere, but it has special importance in a place like Singapore, which acts as a global business node, with many foreign companies investing in the city-state for the long-term.
It means that manpower shortages are still unlikely to both deter new projects or draw current investors away, simply because Singapore is too important. Uncertain political future of Hong Kong and unpredictable behaviour of the government in Beijing only cements Singapore’s importance in Asia.
So, while talent appears to be in short supply everywhere we look, it has even more significant impact on the Lion City, improving bargaining power of local employees and career opportunities they may enjoy here — as long, of course, as they fulfil the criteria.
More managers than makers
At this point, I’d like to interject a word of caution, since reality is rarely even close to perfection — and it is no different in Singapore.
While there may exist many opportunities to land a good job, the number of candidates capable of filling it is also limited not only by the scarcity of people in the tiny city-state, but mismatch of talent as well.
We lack data about specific professional skills that increase the chances of landing a good, attractive position, but given the omnipresence of technology and continuous global investment in various branches of tech for corporate, industrial, logistical or retail use, it certainly makes sense to steer your career in this direction.
However, the data from the Singapore census of 2020 shows that, paradoxically, young Singaporeans are turning away from STEM fields, favouring business and administration instead:
It seems that Singaporean universities might be producing far more managers than makers, and they are the people who create new products and services. If there’s not enough of them, they have to be imported from abroad, raising demand for immigration (which remains a sensitive topic in Singapore).
In addition, lack of well-defined skills (typical in management or administration) is a competitive disadvantage, which may make Singaporeans relatively less attractive and more expensive than foreigners.
Nevertheless, across the board, locals should still see their incomes rising (on average).
Salaries in 2023 – should you stay put or move on?
2022 was, in many ways, a year of economic boom, which followed tough pandemic years. Masks were dropped in most places and people returned to work — including thousands of foreigners, boosting local economic output.
GDP growth was strong, even if we discount it for inflation, and so were the salaries. As I reported recently, the median jumped over S$5,000 — a year earlier than anticipated — and on average, Singaporeans are better off even if we account for the rising prices.
2023 is expected to bring considerable moderation to this rapid pace, with real GDP expected to grow only between 0.5 and 2.5 per cent, while inflation should slow down to at most 4.5 per cent, according to the Monetary Authority of Singapore.
Earnings growth, however, should still outpace all of them.
National Wages Council released its recommendations regarding salaries of Low-Wage Workers (LWWs – the bottom 20 per cent of resident earners) back in November, advising businesses to plan for built-in increments in wages of between 5.5 to 7.5 per cent next year.
We can use it as a guideline, as growth of incomes of LWWs has consistently outpaced the median over the past decade. In addition, we can expect real incomes to rise across the board at at least two to three per cent above the pace of inflation.
This means median incomes could grow within 5.5 to seven per cent range in nominal terms next year, while LWWs could expect as much as eight to nine per cent, when all is said and done.
That is assuming staying in your current workplace.
Moving between jobs could yield a boost of 15 to as much as 20 per cent, according to Robert Walters’ global salary survey for 2023 — and given the global war for talent, this may be your best bet to make the most of the market situation next year.
You may want to consider “shopping around” to check how much you might be worth, knowing that almost every employer is looking to hire capable people. And if you don’t succeed, you might at least learn how and what to improve to increase your chances next time.
Featured Image Credit: Getty Images