Southeast Asia Labor Market Update: A Shift Towards Stability

Restructuring Aftermath and Hiring Optimism

Southeast Asia's labour market has experienced significant turbulence over the past year, primarily driven by widespread restructuring efforts. As companies navigated economic uncertainties, layoffs and downsizing became common practices. However, there are emerging signs that the worst of this period may be behind us.

Many organisations have completed their restructuring processes, and a more optimistic outlook is beginning to prevail. Several companies have indicated their intention to make select hires in the coming months, particularly as we approach the end of the year. This suggests a gradual recovery in hiring activity across the region.

Singapore Labor Market: A Snapshot

According to a recent survey by ManpowerGroup, hiring sentiments in Singapore have gained momentum in the fourth quarter of 2024. Out of the 525 employers surveyed, 46% plan to hire, while 17% anticipate a decrease in their staffing levels. This translates to a Net Employment Outlook (NEO) of +29%, indicating a positive hiring outlook.

The Financials and Real Estate sector is particularly buoyant, with a NEO of +64%, making it the most competitive sector in Singapore. This growth is attributed to the increasing emphasis on quantum and AI technologies within financial institutions.

The Great Retention: A Persistent Trend

In addition to the hiring uptick, another notable trend is the continued prevalence of "the great retention." This term, coined in recent articles, aptly describes the market phenomenon where a significant number of candidates are choosing to stay with their current employers. The prevalence of low employee turnover in many organizations has resulted in restricted internal opportunities, limited employee mobility, and a decreased necessity for external hiring.

Several factors contribute to this trend:

• Economic Uncertainty: Despite the improving outlook, economic concerns persist, making job seekers more cautious about making career changes.
• Company Loyalty: Some employees may feel a stronger sense of loyalty to their organizations after experiencing layoffs or other economic hardships.
• Remote Work Flexibility: The increased acceptance of remote work arrangements has made it easier for employees to balance their professional and personal lives, reducing the need to seek new opportunities.

As the Southeast Asian labour market continues to evolve, HR professionals will need to adapt their strategies to meet the changing needs of their organizations and employees. By focusing on talent acquisition, retention, and development, HR can help drive business success and contribute to a more stable and prosperous regional economy.