Southeast Asia is one of the world’s fastest-expanding regions, with many analysts predicting that it will soon become the world’s fourth-largest economic zone. With this region’s tremendous expansion, the role of human resources in enterprises is changing dramatically. Recently, a talent crunch in Southeast Asia and mass layoffs have threatened many businesses in the region.
While there have long been talent shortages due to increasing digitisation and changing work practices thanks to the introduction of innovative technology, the layoffs result somewhat from the current regional and global economic downturns and related concerns. Human Resource (HR) management faces formidable challenges in assisting organisations as they strive to become top talent destinations, develop the workforce of the future, and retain top personnel, all while providing strategic insight to key decision-makers.

We explore the future of HR in Southeast Asia according to Darwinbox
We dive into some of the HR trends 2023 will likely witness as startups prepare to future-proof their companies and turn impending difficulties into opportunities.
Most in-demand employee skills
While technical skills remain critical for many professions, companies place a high value on human skills such as cooperation, communication, and leadership to increase the efficiency and productivity of staff. Businesses seek personnel who can stay relevant and versatile in an unpredictable economy, while those who fail to upskill will be left behind by others who are more prepared and adaptable.
As recessionary threats loom over the world, Singapore, Thailand, Indonesia, the Philippines, and Malaysia, are likely to be affected primarily due to the impact on tourism and trade, putting additional strain on local businesses and employees.
Learning company Pearson released a skills outlook study which identified today’s new “power skills” that will help future young talents keen to upskill themselves and obtain work. According to the skills outlook report, the five most essential skills for today’s employers are all human or soft skills: communication, customer focus, leadership, collaboration, and attention to detail.
Furthermore, as the adoption of technology persists, non-technical abilities such as the ability to develop cultural and social intelligence are becoming increasingly crucial. Organisations that understand this importance will prioritise training their staff in adaptable skills to help them prosper in the ever-changing world of business and commerce.
How can HRTech help?
The global human resource management market will likely reach USD 30.01 billion by 2025, growing at an 11% CAGR between 2019 and 2025. The HRtech sector is also evolving at a fast pace, embracing innovative technology and utilising it to change the HR landscape. According to the People Matters State of HR Technology Report 2019-20, the extended segment of work (which encompasses workforce productivity, the gig economy, business benefits, workforce healthcare, and robotics) is estimated to be worth USD 300 billion.
With many new cutting-edge tools and technologies at their disposal, HR leaders have progressed beyond just automating regular administrative procedures such as attendance and payroll. Artificial Intelligence (AI) technology is being used in workforce management, career planning, talent acquisition, learning & development (L&D), employee engagement, and business intelligence. Leaders worldwide, including those in the Asia-Pacific region, are working towards developing policies and processes in which technology plays a fundamental role.
HR leaders are digitising their work and the entire process to integrate technology into the core of job duties. This significant shift demonstrates that firms are now embracing the possibilities of intelligent technology by reimagining recruitment, employee engagement, and training with an unwavering focus on the employee experience.
What lies ahead?
In Southeast Asia, investment in innovative HR tools and systems has been gradually increasing, with most firms in the APAC area planning to raise their HR IT spending. HR Tech adoption has been in the double digits for the last three years, with small businesses the fastest-growing category of all new adopters of innovative products and services.
In terms of technology, there is an opportunity in all elements of human resources. Part of it is motivated by organisations’ goals, such as becoming more digital and using automation as much as possible. Other benefits of using HRtech include increasing employee productivity and efficiency and the ability to swiftly respond to shifting business and employment models.
Despite massive layoffs and the talent crunch in Southeast Asia, the region urgently needs intelligent technology to bridge the gap and relieve some of the pressure startups are experiencing. With the help of intelligent technology, it will be possible to increase the productivity and efficiency of businesses.
Companies must focus on recruiting the most suitable individuals for every position, even if they must look outside the region. This search for high-level staff must occur in tandem with investing in the upskilling of young talents as they progress in their careers. Government agencies also play a significant role in guiding startups on what they can do to improve the effectiveness of HR in a company. The HR trends 2023 is likely to see are crucial for stabilizing the turbulent economy.