Saturday, January 8, 2011

Now hiring ... just about anybody

TALENT is always in short supply - and high demand - in good times and bad. But as the economy bounces back from the worst recession in memory, the jobs with the most openings did not set the bar very high.

Teachers? OK, maybe. But security guards, waiters and salesgirls?

Sure, workers with a minimum university degree were also in demand in the past year as employers went on a hiring spree, churning out 82,000 new jobs in the first nine months of 2010 - after a year of almost flat growth in 2009 when just 100 jobs were created.

Unemployment was pushed down from 2.2 per cent in June to 2.1 per cent in end-September, a rate that many professional recruiters and economists thought was as low as it could go for now.

Still, even though professionals, managers and executives made up over half of the workforce, the Ministry of Manpower's job vacancy figures show the most sought-after occupations in the first nine months of last year (figures for the final three months are still unavailable) were teachers, security officers, waiters and retail assistants.

The openings for these jobs are not only likely to persist but grow in number in 2011, as jobs are coming into the market faster than they are taken up. It takes time to train teachers, while more pupils are enrolled yearly.

And while more workers are needed in restaurants and shopping malls as diners and shoppers make a comeback after a year of austerity, the government has tightened the foreign-worker policy to make it more expensive to import workers to make up the shortfall.

Employers in need of security guards can't even hire foreigners, except Malaysians. They can turn to the growing pool of retirees, but not many are going to have much luck there.

The reality is that few Singaporeans want to be a security guard, a waiter or a salesgirl. The young ones, who are better educated these days, don't see a bright future in these jobs - especially when there are plenty of other jobs to choose from with the economy growing again.

After a 1.3 per cent dip in 2009, the economy roared back with a vengeance to post a record 14.7 per cent rise. Some 36,500 jobs were created in the first three months of 2010, according to the Ministry of Manpower.

While the number tapered off to 24,900 in the second quarter and 20,500 in the third because of the completion of several mega building projects such as the integrated resorts, the overall labour market stayed robust with very low unemployment.

Economists, in fact, saw the slide to be in keeping with normal economic recovery patterns. 'What we are seeing is really the usual business cycle effect - there is initial spike and then things slowly ease to a more sustainable level,' labour economist Shandre Thangavelu told The Straits Times.

But the labour market was still tight, if not tighter. Job-hopping remained rampant, with the attrition rate tipped to jump from 9 per cent in 2009 to as high as 18 per cent by end-2010.

'Labour market conditions are becoming very tight, especially considering that the government seems to be increasingly reluctant to allow entry of as many new foreign workers as in the past,' says a JP Morgan Chase Bank report.

While workers were begging for jobs in America and Europe, in Singapore jobs were begging for workers. And workers here had a field day hopping from job to job to make the best of the tight labour market.

Recruitment firm Ambition says that workers who jumped ship could see their pay surge 8-15 per cent. This was way above normal increments which averaged 3.6 per cent across industries in 2010, with those in the banking and financial industry exceeding 4 per cent.

The situation is not likely to have eased. Economists expect employment to pick up in the fourth quarter of 2010, with estimates ranging from 28,000 to 48,000 new jobs on top of the 82,000 already created. If they were right, the government would have hit its target of adding at least 100,000 jobs to the economy last year.

'The fourth quarter is usually strong for us due to seasonal factors,' said Prof Thangavelu. 'It is the holiday season. We should see stronger growth from the services sector as business picks up in retail, hotel and tourism.'

The services sector have produced the bulk of the jobs in the past year - all the new jobs in the third quarter came from services. Financial services accounted for the biggest chunk of the increase, adding 4,500 jobs. It's a good bet that the sector will continue to drive job growth in 2011.

Economic growth is projected to slow this year to 4-6 per cent, but employers are expected to push on strongly with hiring. Companies polled by Ambition expect even better business in 2011. In any case, recruitment looks set to rise further, at least in the months to come.

Recruitment firm Manpower's latest Employment Outlook poll shows more bosses budgeting for more workers in the first quarter of the new year. Employers in all seven sectors polled - finance, insurance and real estate; manufacturing; construction; public administration and education; services; transportation and utilities; and wholesale and retail - see higher staffing, with finance, insurance and real estate at their most bullish in two years.

Concerns are already being raised about pay hikes and inflation. 'Even though economic growth is softening, we expect tight labour market conditions to limit downside risks to inflation in coming quarters,' says the JP Morgan Chase report.

Adds Lynne Ng, regional director of recruitment firm Adecco SEA: 'The need to hire strong team members and to retain valued employees will, we expect, see employers offer competitive salaries and salary increments in 2011.'

Human resource firms Mercer and Aon Hewitt see higher pay hikes averaging 4.4 per cent this year - a figure that comes close to pre-crisis levels. Economist Tan Khee Giap of the Lee Kuan Yew School of Public Policy predicted nominal median incomes to rise by at least 5 per cent by June, with the services sector and two integrated resorts set to expand and further tighten the labour market.

Inflation, already flirting near 4 per cent in recent months, is tipped to be a big challenge this year. But apart from JP Morgan, the focus is more on what it will do to real wages than on what wages will do to it. With inflation projected to rise 4 per cent or more, high by Singapore's standards, real pay in 2011 may hardly increase at all.

That may be good news for labour productivity, whose growth over the year slowed from 15 per cent in the second quarter of 2010 to 6.3 per cent in the third quarter. But that's no consolation for workers.

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