Labour shortages and talent migration are currently changing the business dynamic in Asia-Pacific (APAC), which is having a major impact on businesses across the region. Rising salaries and heightened talent competition underscore the transformative impact. Yet, while businesses are grappling for the top talent with competitive salaries, there are additional factors at play that are driving employees to search for new employment opportunities. For example, company culture and other ‘soft motivators’, such as work benefits and flexible working, are causing labour migration among C-suite professions in particular.
We’ll provide a deep dive into the contributing factors playing into the current talent crisis taking place in APAC and provide actionable advice for businesses looking to overcome the challenges associated with these subsequent labour shortages.
What’s in this article?
- The impact of border controls on the job market in Asia-Pacific
- What’s next for The Great Resignation in Asia-Pacific?
- How businesses can attract and retain employees in the face of talent shortages
The impact of border controls on the job market in Asia-Pacific
The outbreak of COVID-19 triggered widespread border restrictions across the Asia-Pacific region (APAC) as governments scrambled to curb the virus's transmission. Stringent measures, such as travel bans, quarantine mandates, and entry limitations, were swiftly implemented to contain the pandemic's spread. These measures inadvertently impacted labour mobility, trade, and international relations throughout APAC.
The aftermath of the pandemic has seen a prolonged recovery period for the APAC job market.
In Australia unemployment rate dropped to a record-low in May 2022, at just under 4%, and is predicted to maintain this loss. However, Australia's trajectory has not been without its complexities. The strategic closure of borders in response to the pandemic precipitated labour shortages, inducing a palpable decline in overseas migration - a pivotal driver for the country’s workforce. Prior to the pandemic, an astonishing 10% of workers in Australia held a temporary work visa, which meant many people were forced to leave their jobs and depart from the country when the pandemic hit. As a result, a surge in job vacancies ensued. This necessitated Australian businesses to pivot towards a local talent pool, thereby highlighting a paradigm shift in talent acquisition and workforce strategies.
Despite the end of the COVID-19 pandemic, the Asia-Pacific region is currently undergoing a significant talent migration resurgence after a two-year hiatus. Addressing this resurgence and returning to pre-pandemic talent levels poses a substantial challenge. For example, Australia has taken proactive measures to facilitate the entry and retention of skilled talent in the post-COVID era. They have implemented new legislation and visa programmes aimed at attracting and retaining skilled professionals, such as the Global Talent Visa programme, the Business Innovation and Investment Visa, Innovation and Technology Visas, as well as the Temporary Skill Shortage (TSS) Visa (subclass 482).
What do these labour shortages mean for businesses?
Ultimately, when a country closes its borders or implements strict immigration policies, it can limit the flow of foreign workers into its labour market, resulting in several key outcomes, including:
- Escalating talent rivalry and elevated salaries: In recent years, tech salaries have been skyrocketing with the large tech firms and small start-ups competing for the same talent pool. While businesses should be cautious with their hiring strategies this year, a greater focus will be put on hiring for ‘revenue-generating roles’, with the priority on engineering, business development and sales, and marketing and public relations in tech.
- Inflationary pressure: The pervasive force of inflation exerts a discernible impact on employment dynamics, prompting businesses to navigate the delicate balance between offering competitive compensation to retain talent while mitigating its effect on operational costs and profitability.
- Higher bargaining power for workers: The scales have tipped in favour of the workforce, granting employees augmented bargaining power as industries grapple with labour scarcity.
- Increased demand for automation: The burgeoning demand for automation solutions can be seen across industries. Companies must embrace this shift to make up for talent and labour shortages, harnessing automation to augment human potential and achieve sustainable growth.
- Impact on economic growth: The intricate interplay between talent availability, inflation, and automation bears repercussions on broader economic growth trajectories.
- Hiring and retention challenges: The combination of factors driving talent mobility places businesses in a crucible of recruitment and retention challenges, prompting a reevaluation of company culture, benefits, and professional growth pathways to secure and nurture top-tier professionals.
- The need for strategic workforce planning: The multifaceted landscape mandates a strategic approach to workforce planning, entailing the alignment of recruitment, retention, and skill development initiatives within an organisation's long-term objectives.
What’s next for The Great Resignation in Asia-Pacific?
In this era of economic complexity marked by inflation, and intensifying competition, the job market is influenced by multiple factors that transcend mere salary considerations. Remarkably, even as the clamour for higher wages reverberates, the landscape is being reshaped by a symphony of resignations and career migrations propelled by factors beyond financial gain.
It was thought that in 2022 The Great Resignation was at its peak, yet the issue has since grown with approximately 30% of employees likely to change jobs within the next 12 months. And the problem is even more severe among higher levels of seniority. Surveys reveal that 75% of leaders will be looking for new career prospects over the next few months. Consequently, many companies are in need of skilled workers, and there are more job openings than there are people to fill them in many industries in the APAC region. While salaries are still important to leadership candidates, it is not the only thing that makes them want to work there or stay there. Nowadays, candidates also want to know about the company's way of doing things, what it stands for, and how the leaders act.
The same survey also reveals that 86% of the respondents across Asia-Pacific believe that their company does not take active steps to ensure work-life balance, which is something businesses cannot afford to lose talent over. In such a competitive market, businesses must be protective in responding to these issues.
What we are witnessing is the dawn of a candidate's market, characterised by the prerogative of choice. As a result, businesses need to be smarter with what they offer candidates and how they engage with them, adapting to evolving expectations to secure and cultivate the best talent.
How businesses can attract and retain employees in the face of talent shortages
If you’re currently facing recruitment challenges and struggling to retain talent, follow our advice. Here’s our six top tips for businesses looking to overcome talent shortages brought on by talent migration:
- Hire local talent
- Improve employee benefits and ‘soft’ motivators
- Advocate for equality of gender representation
- Invest in digital upskilling
- Implement new technology
- Work with a talent solutions partner
1. Hire local talent
There are many benefits to hiring local talent, such as their expertise in local customs and language, which can facilitate enhanced collaboration and improved customer relations. Not to mention, hiring locals can yield higher employee retention as employees would not be affected by potential future border restrictions or visa cuts. Moreover, this strategic choice contributes to a flourishing local economy, creating a ripple effect that boosts community growth and prosperity. Singapore currently has numerous government initiatives in place to boost locals in employment and is a prime example of the benefits it can have for organisations. Read more about attracting local talent in Singapore.
2. Improve employee benefits and ‘soft’ motivators
Delving beyond financial incentives, businesses can strategically increase their candidate appeal through an array of non-monetary perks. This could include offering continuous learning opportunities, wellbeing budgets, social events, and more.
Surveys reveal that 64% of leaders said they would sacrifice money for more happiness, As such, the intrinsic value of fostering a conducive and fulfilling work environment emerges as a pivotal consideration, warranting careful attention in talent attraction and retention strategies.
3. Advocate for equality of gender representation
It is imperative that businesses cast their net wider to reach untapped talent pools, with a particular focus on addressing the underrepresentation of women. Throughout the Asia-Pacific region, such as societies in Japan and China, countries grapple with gender imbalances in the workplace, which is largely influenced by entrenched traditional perspectives. Navigating these cultural contours, companies can pioneer transformative change by actively engaging and empowering women, thereby not only enriching their own talent pool but also contributing to broader societal progress and gender equality.
It is estimated that APAC could add $4.5 trillion to annual GDP in 2025 by closing the gender employment gap. But how do you do this? There are numerous ways you can attract, engage, and retain women in tech and any other industry. Addressing the gender wage gap stands as a foundational measure, encompassing fair compensation structures that recognise skill and expertise without bias. For more information on how to calculate gender pay gaps, read our guide to gender pay gap reporting for businesses.
To empower women's advancement, fostering female representation at all organisational levels is essential, not only diversifying perspectives but also demonstrating the company's dedication to gender equality. This can also help towards closing the gender pay gap, providing women with the opportunity to obtain higher-paying roles.
Implementing robust mentorship and sponsorship initiatives can also provide invaluable guidance, encouraging women's professional growth and propelling them towards leadership roles. Integrating family-friendly work policies and benefits acknowledges the multifaceted roles women often embrace, promoting work-life balance and overall well-being.
In a wider context, tapping into diverse talent pools is key to reaching underrepresented talent, however, in order to retain this talent, you also need to practise diversity and inclusion organisation-wide. To do so, you should aim to implement dedicated diversity and inclusion initiatives, such as employee networks and celebrations of diversity.
4. Invest in digital upskilling
Don’t underestimate the power of your existing teams. You can maximise your existing teams without the need to hire more talent through effective upskilling programmes. This will not only ensure your teams have the skills they need to make up for potential skills shortages but upskilling can be motivational for teams, giving them better career progression and improving staff retention rates.
Moreover, in some cases, it can be beneficial to hire under-qualified candidates with the intention of investing in digital and professional upskilling. In fact, this can prove a cost-effective hiring strategy for businesses feeling the pinch of inflation. Not only is this hiring method beneficial for businesses however, it also gives individuals access to career opportunities they might not otherwise have, enabling for greater social mobility.
At FDM, we are dedicated to facilitating social mobility, providing graduates, ex-forces, and returners the opportunity to learn new skills, industry-recognised qualification, and go on to make real change within our clients’ teams.
5. Implement new technology
Leveraging cutting-edge technology, particularly cloud computing and AI, can synergise with employees, working hand-in-hand to amplify efficiency and drive cost savings. Automation, data analysis, and streamlined workflows empower teams, augmenting their capabilities while optimising operations, ultimately leading to enhanced productivity and reduced expenditures. The demand for AI within organisations has skyrocketed and it’s easy to see why!
Additionally, AI and other technologies can help improve job satisfaction, which leads to higher retention rates as a result. For example, by automating routine tasks or facilitating decision-making processes, businesses enhance the overall job experience, which fosters lasting commitment among their workforce.
6. Work with a talent solutions partner
Joining forces with a talent solutions partner provides a sustainable strategy to address your recruitment issues, supporting your talent requirements long-term and offering scalable solutions.
FDM stands as an exceptional talent solutions partner, offering our clients recruitment solutions that align with their unique needs and budgets. We have over 30 years of experience partnering with leading businesses to provide talent acquisition solutions based on client demand, therefore providing minimal risk for our clients. We also offer training, development, and wellness programmes for our consultants, ensuring consultants stay engaged and motivated, saving you costs for human resources budget and candidate processing.
Clients have a 24-month talent guarantee, coupled with the flexibility to seamlessly transition consultants to permanent roles after two years, thereby elevating long-term value.
Access on-demand talent that are engaged and motivated. Check out our consultant services or get in touch to find out how we can help you build a sustainable talent pipeline and overcome your labour shortages without delay!