29 Jan

Ways to prevent the Tech Talent Crunch from hurting your business

Is Singapore Facing a Tech Talent Crunch?

Getting the right tech talent on board is one of the top concerns for firms in Singapore. This is evident from the Annual Business Survey conducted by SGTech which highlighted a staggering 85% of firms citing hiring constraints as their greatest challenge. Singapore, being a regional technological hub, sees a constant flow in the number of tech entrants into the market. Not only are tech firms looking to hire IT talents, but non-tech companies are also similarly hiring more technology professionals to ramp up their digital transformation plans.

This commercial crisis is looming over organisations and economies throughout the world. Besides Singapore, the United States, the current world-leading technology market, suffers from a tech talent deficit as well. They are expected to incur a loss of $162.25 billion by 2030 due to sector skills shortages. Globally, a study conducted by Korn Ferry finds that by 2030, there will be a global skilled talent shortage of more than 85.2 million people, or roughly equivalent to the population of Germany. Left unchecked, in 2030 that talent shortage could result in more than $8.5 trillion in unrealized annual revenues.

The conundrum around tech talent shortage in Singapore is now a rising concern.

Why are we facing a Tech Talent Crunch in Singapore?

Cited from Dr. Vivian Balakrishnan, Minister-in-charge of the Smart Nation Initiative, the information communications sector would need another 60,000 professionals over the next three years. Tech talented workforce is dwindling and finding it hard to keep up with the demand. This has set the scene for a tech talent crunch.

Tech giants’ entry into Singapore

Singapore is already home to the regional offices of hundreds of tech companies like Facebook and Google. In 2020 alone, 6 tech giants have announced their plan of ramping up their presence in Singapore. In Asia, Japanese MNC, Rakuten Mobile has established its global headquarters in Singapore. From East Asia, Tencent Holdings declared Singapore is selected as its beachhead in Asia, joining rivals Alibaba, Bigo Live, and Bytedance. Moving to the United States, both Twitter and Zoom have also unveiled their plans of setting up an Engineering Centre and Data Centre in Singapore respectively. Inarguably, the hiring demand for tech talents in Singapore is set to increase drastically.

Tech talent isn’t limited to the tech space

According to the 2021 Market Outlook report of Randstad Singapore, the information and communication technology sector are one of the sectors that remain steadfast despite the Covid-19 pandemic. Hiring in this sector is predicted to climb further this year.

With rapid technology advancement, firms are looking to ride the wave of digital transformation, driving tech talent demand. In addition to IT firms, non-tech companies such as retail, banking, and food & beverage are pivoting their business models from offline to online. Inevitably, the demand for IT talents far outstripped the local supply of tech talent.

Covid-19 accelerate digitalization

The sudden and massive shock of the Covid-19 pandemic and shutdown measures have plunged the economy into a severe contraction. Companies that once mapped digital strategy in 1-3 year phases must now speed up their implementation in a matter of weeks or months. It is imperative for businesses to react and adapt with agility – moving operations to the online space, in order to stay afloat and build resilience for the years ahead. The erstwhile ‘good to have’ digital capabilities are now a ‘must have’ as consumers buying behaviours reposition to the digital realm.

Tightening of foreign policy

As the Covid-19 pandemic hit Singapore’s economy, the slew of changes to our foreign labour policy is implemented in the efforts to combat rising retrenchments and address concerns about the competition between Singaporeans and Foreigners in the job market.

Border curbs due to the coronavirus and tighter foreign worker policies are delaying overseas hiring, exacerbating the tech talent deficit in Singapore. Foreign workers are known to be a good source of tech talents. However, companies are facing increased barriers to hiring foreign workers with the restructuring of the foreign labour market.

How will the Tech Talent Shortage impact your business?

Slow down expansion and threaten growth plans

A study done by Google and Temasek revealed that the shortage of local talents is the most pressing issue impeding the growth of southeast Asian start-up companies. Firms find it increasingly challenging to bring onboard qualified IT talents which result in their failure to embrace the digital push and adopt new technologies.

Loss of revenue

Imminent skilled labour shortage could cost Singapore companies millions in unrealised annual revenues. Companies with a shortage of tech talent suffer from project delays and operational deficiencies. Smaller businesses have expressed that they tend to look at contracting firms as a last resort when they are unable to meet project deadlines. This results in heighten cost and lower profit margins.

With the lack of IT professionals, firms are also unable to realise their full potential and come up with innovative solutions that could have served consumers better. Undoubtedly, the tech talent crunch will impact companies’ overall financial performance.

Ways to overcome the Tech Talent Crunch

Hiring tech talent is cited as the main challenge faced by hiring managers. Large companies are confronted with very demanding hiring objectives — sourcing candidates from a limited talent pool and competing against each other for the cream of the crop. It is even more difficult for start-ups and SMEs that struggle to match the welfare and benefits that well-funded MNCs can offer.

Offer beyond a competitive salary

Salary by far is the first factor tech talents consider when it comes to applying for a job. However, to win in a candidate-driven market would take more than offering an attractive remuneration package. Factors such as working environment, career potential, flexible work schedules, and work-life balance are also crucial in attracting these IT professionals. Even little things like allowing employees to dress down and flexible working options can make a huge difference in getting your critical tech talents on board.

Referral

Referrals are a good source of potentially great candidates. Tap into the social networks of your existing IT staff as their social circle might consist of more individuals specialising in the IT sectors. A simple re-post of the job openings would go a long way in reaching out to a wider network of IT professionals. Your referral program does not have to be loaded with incentives, it can come in the form of a monetary bonus or a brand new iPhone or Tablet whenever a referral is successfully hired.

Training and reskilling

When all recruitment strategies are already put in place, companies can look to implement training programs for existing employees. Internal hires can be looking for opportunities to department transfer to take up new job responsibilities and challenges. Companies can tap on these ready source of talents and train them for roles that the organisation lacks. For instance, Ekekwe, the founder of First Atlantic Semiconductors & Microelectronics, partners with local universities to run workshops and develop courses to groom new workers who can navigate the company’s newest technologies.

Close the tech talent gap with the help of IT staffing firms

Elicit the help of the experts in the technology recruitment scene. In the competition for tech talents, a fast hiring cycle is key. Some companies can go as fast as making an offer on the day the final round of interview is conducted. Qualified candidates do not sit around for long as cited from a software engineer, Xiao Yuguang, who received 3 job offers daily.

Companies can speed up their hiring with external help from staffing firms such as EPS Consultants, as they take charge of all administrative and tedious processes, including sieving through thousands of job applications, screening for suitable profiles, and arranging for interviews.

Staffing firms that specialise in IT and Technology recruitment also has added advantage as they amass an army of tech talents in their database. These consultants also invest the time and effort to build rapport and form connections with qualified IT talents which could be of assistance in reaching out to a wider talent pool.

Tech staff retention – Inbound Recruiting

The ability to retain IT talents is also as important. Many firms have cited that the turnover rate for their IT roles is higher than other departments’, highlighting the lack of proper staff retention strategies put in place. A high turnover rate creates escalating costs in the form of time and money, the two resources tech companies cannot afford to waste. A corporation can absorb the cost of a bad hire; a startup can’t.

Inbound recruiting is the answer to this problem. Simply put, it refers to creating a remarkable experience for job seekers and employees by producing branded content that will increase your employer brand. Especially true for IT talents, the retention strategy does not hinge on the salary packages or job responsibilities anymore. They are driven by organisational culture and are more likely to stay in the company longer when they enjoy the work they do, people they work with, and the way things get done in the company. Turn candidates into fans of your culture by showcasing a unique set of values, missions, and perspectives in your company. Allow applicants to get an authentic look inside your organisation and it should be the true north of your inbound efforts.

Summary

As Singapore’s government looks to implement more measures in curbing the tech talent crunch, organisations should not be idling as execution and results of these implementations would take time. To safeguard one against the impact of the talent shortage, firms should put in place strong recruitment strategies and take up mutually beneficial partnership with IT staffing firms. This would help to ensure businesses are able to recruit critical tech talents and steer clear of the imminent dangers.