Companies in the Association of Southeast Asian Nations (ASEAN) continue to lay off large numbers of their workforces despite the talent crunch that plagues the region. Hiring in the current labour market and going into 2023 will be challenging, with employee attraction and engagement being top business concerns. Organisational and worker needs have changed due to various factors, and it is now vital for employers to adapt to win the talent war Southeast Asia is experiencing.
The fight for the best talent is worsening in the tech industry as businesses deal with the deteriorating global economic climate. Southeast Asian companies like Shopee, Zenius, and LinkAja are some big tech companies that have laid off many employees. Shopee, which Sea Limited owns, cited the need to streamline its business for efficiency and the economic situation as reasons for the mass firings.
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Another concern has been the shift in employee expectations after the COVID-19 pandemic ravaged the world and destroyed businesses. The post-pandemic period ushered in a trend known as the Great Resignation. Workers were now looking for work-life balance, less stressful jobs, roles they were passionate about, reduced workloads, and jobs where they could connect with other people.
Talent hiring trends in Southeast Asia
According to the 2022 Global Talent Trends Study: The Rise of the Relatable Organisation, seven in ten C-suite executives in Asia said they were facing a labour shortage crisis that shows no signs of abating. Talent attraction and retention were top of mind for the executives, but nearly two in five workers were considering or planning to go to a new company that met their expectations.
Half of the employees were focused on a work-life balance, forgoing career progression and development in exchange for flexibility and time off. The possibility of remote work has become a significant deal breaker for seven out of ten employees. However, executives are concerned about productivity and a breakdown in working relationships, which are crucial for a company’s development and advancement.
Furthermore, 97% of employers have noticed significant skills gaps among the talents in Asia, and there is a need to upskill or reskill employees. Human Resources (HR) leaders are struggling to keep up with the workforce’s needs, and there is a fear that upskilled talent will move to other companies.
Other challenges affecting hiring in ASEAN include the reduction in investment for startups due to the global economic climate. Some industries are being starved of funding as investors focus on the financial technology (fintech) and green technology (Greentech) sectors. Venture capital (VC) firms and angel investors are holding on to their money as they assess the situation, affecting talent recruitment and depleting the inadequate resources needed for upskilling.
Meanwhile, inflation and high-interest rates are raising business costs and limiting hiring to only a few people. Regulatory hurdles, a lack of government support, and the remaining pandemic restrictions are also hurting recruitment.
How companies can overcome the talent crunch
A Mednefits survey of 200 human resource experts in Malaysia and Singapore—the 2022 employee benefits trend report—shows that companies need to offer customised and flexible benefits to stay competitive in the hiring market and attract potential employees. Moving away from traditional benefits to lower costs, provide flexible benefits, and deliver greater coverage is challenging for many companies.
Companies in Singapore (55%) and Malaysia (74%), for example, currently use insurance providers to manage employee medical benefits. Nearly one in five companies surveyed are using both insurance and self-managed medical options, meaning the businesses reimburse their workers for some of the benefits they select.
Moreover, the survey shows that Malaysia and Singapore differ in how they administer their medical benefits. Singaporean companies focus more on self-managed medical options and company reimbursement than Malaysian companies, at 48% to 46%. Hospitalisation benefits were widespread in Malaysia at 81%-69%, and Singapore organisations paid for more refunds for general practitioners than Malaysia at 71%-40%.
Ultimately, the talent war Southeast Asia is experiencing means companies must find a way to be relevant and beat out their competitors in attracting the best talent. That requires that employers make the correct changes to the company culture, hiring strategies, and office policies to boost employee attraction and engagement.
Workers need a healthy office environment and culture, hybrid working options, and adequate benefits to protect their health, mental wellness, and productivity. Employers should adopt an employee-first approach and personalise their experiences to breed loyalty to the company and reduce turnovers.
Due to extensive competition and an ever-increasing talent crunch, companies should use recruitment technology and predictive analysis to expand their talent searches beyond borders. Finally, they should have a talent pipeline, for example, by recruiting college students before graduation. With these approaches, ASEAN companies will be able to hire the best talent in 2023 and beyond.