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Despite job cuts in certain sectors, 2008 has not all been doom and gloom as far as the Singapore/South-East Asia job markets are concerned, and nor is 2009 likely to witness a severe employment downturn in the region. Commenting specifically on the Construction and Oil & Gas sectors, both these markets have supported strong demand for talent throughout the year, and there are no early signs that these sectors are about to contract severely any time soon.
Whilst there is no denying that employers have become more cautious with their hiring decisions, particularly during the current Q4 of 2008, there are limited signs of wide-spread recruitment ‘freezes’ or contractions within the Construction and Oil & Gas sectors. During the course of 2008, there has been a consistent and relatively high demand for specialist skill sets.
During the second half of 2008 we have seen a dramatic increase for contract and temporary staff who are employed for the duration of a project/phase. We have also received increased job orders for positions such as Claims Surveyors, Cost Managers and Quantity Surveyors, as firms ‘tighten their belts’ to cut out unnecessary cost over-spills.
Broadly speaking, 2008 has seen consistent and high demand for talent with 4-10 years experience. Opportunities will always exist for strong talent with the right skill sets. Interestingly enough, Manpower surveyed 629 employers in Singapore during Q3 of 2008, and produced a research paper titled ‘Employment Outlook’ for Q4 2008. They found that 26% of employers predicted an increase in hiring, with 44% of companies predicting no change in hiring patterns and 10% expected a decrease. Respondents were asked the following question:
“ How do you anticipate total employment at your location to change in the 3 months to the end of Dec 2008 compared to the current quarter Q3 2008 ”
From our own experience several construction projects in Singapore, for example the two IR’s and rail projects such as the Circle Line and the upcoming Downtown Line, are examples of projects which are already committed, and despite potential delays, must be completed as close to the scheduled completions dates as possible. With this in mind, there has been no decrease or easing of demand for skilled Engineers, Technicians, Architects, Surveyors, Structural Candidates etc. Admittedly the 2nd half of 2008 has seen certain Clients prolonging their hiring decisions, where decisions usually taking up to 2 weeks, may now take up to 4 weeks. Despite some employers recruiting at a slower pace there is a higher degree of consideration with hiring decisions. However total recruitment ‘freezes’ will not be the ‘trodden path’ for the Construction, Oil & Gas sectors. It is more a case of ‘business as usual’ with some Client’s citing a slower hiring process, as opposed to a ‘no hiring’ process.
The Singapore Construction, Oil & Gas industry has not faced huge retrenchment issues which have been cited in the UK and US, and other sectors in Singapore during 2008. On the other side of the retrenchment issue, we have witnessed a huge surge in applications from Candidates within the UK and US, who wish to relocate to Asia, following the sharper impact of the economic downturns within their respective countries. In theory, this means employers in Singapore have a larger pool of talent to choose from, however Clients here have been leaning towards employing talent locally/regionally where possible, to avoid paying expensive expat packages. We expect this trend to continue into 2009, with expat's willing to accept lesser packages to relocate to Asia, in light of the credit crunch in their home countries.
Projects are highly unlikely to grind to a total standstill. Whilst the manpower demands of a project may waiver slightly, we expect no dramatic seizure of recruiting activities. From a Jobseeker’s perspective, up-skilling and training is of paramount importance, as employers may be more ‘choosy’ when selecting talent, cherry picking the best. Employers may also go through a job re-design process, where they can ‘cut the fat’ and shed the ‘dead wood’ they have been carrying. This is not necessarily a negative notion, but more of a ‘cleansing’ process. Once again, strong, efficient and competent candidates will always be in demand.
Focusing on the Construction & Real Estate sector, we have seen and predict a sustained demand for candidates with 4+ years ‘project relevant’ experience, as well as Engineers, locally registered Design Candidates, Quantity Surveyors/Cost Consultants, Project Managers, and Geotechnical Candidates.
As far as Construction, Oil & Gas industries go, we are witnessing continued investment into the region, albeit with an added degree of caution. For a Recruiter within these sectors, the added ‘caution’, simply means careful hiring with the possibility of a lengthier recruitment process at worst. I say ‘at worst’, as the chances of Contractors, Consultants, Clients, and Developers actually shutting down construction and plant sites, and sending all their foreign workers home are fairly slim. Several of the projects are well committed and the construction process often continues for years prior to completion. The projects still physically need the expertise and man-hours to complete on time, however companies are likely to join in with the rest of the world when it comes to reviewing annual salary increments, staff travel, perks, bonus payments, with possible job redesign, and retrenchment of non-core personnel.
Singapore continues to attract international players, both Blue-Chip and Multi-Nationals into the Republic. The transparent and favourable tax and business climate continues to attract companies into the region, where they need to recruit entire teams and departments. From a Construction and Engineering perspective, 2008 saw not only the arrival of certain firms into the region, but also expansion of existing offices, as they service and execute projects in surrounding Asian countries, as well as locally. With this trend firmly in place, we saw an increased mobility in the global
talent-force, where geographical borders to work in other countries diminished further.
Focusing on the buoyant Oil & Gas sector, 2008 has seen solid and unwavering demand for Candidates at most levels across the sector. Singapore’s Oil & Gas market has remained steady despite the wildly fluctuating oil prices and economic global climate. Onshore construction based projects has created stable demand for talent, and investments into new Onshore projects will see continued job orders coming from Clients, well into 2009. The REC project is a clear example of this already happening. Whilst we have witnessed clear streams of work being channeled towards China, and major FPSO developments are near completion, there have been major investments and awards made to new upcoming projects in both offshore, and FPSO markets, which will uphold demand for talent well into 2009.
Whilst we don’t expect overall demand for recruiting talent to decrease wildly during 2009 within the Construction, Oil & Gas sectors, we expect a ‘shift’ in demand to occur for skill sets and working practices such as contract assignments and/or temporary staff. This will be largely due to the several projects shifting from design stages to construction within refinery projects, as well as broad-brush Construction developments (Rail, Commercial, Infrastructure, Civil works). Hence Contractors and Sub-Contractors will look to expand their teams to execute the projects. The more ‘cautious’ hiring managers, may opt to offer temporary contracts as opposed to permanent contracts which they would have originally offered, so they can maintain a flexible workforce, only for the duration of the project/phase, giving them added ‘security’ against further market declines. We also envisage further Headquarter relocations from the West to the East.
Following several years of salary increases, particularly within the Oil & Gas sectors, broadly speaking we expect to see salaries plateau, as such increments are not sustainable in the current climate.
PREDICTIONS & COMMENTS 2009
With Singapore essentially being a small island with an open trading economy, vulnerabilities run deep when it’s major export markets such as Europe, India, US and Japan are hit with downturns. Whilst the overall situation looks set to get a lot worse before it gets better, 2009 continues to have a steady outlook for the Construction, Oil & Gas sectors. Particularly as projects at feasibility stages are not only underway, but many are now entering construction phases of varying lengths.
Given current economic ‘unknowns’, candidates from UAE, Malaysia, Vietnam, China and Philippines will continue to be attracted to the favourable lifestyle associated with Singapore, particularly as many Construction, Oil & Gas projects remain largely unaffected by the global downturn, which lends itself to the reputation of stability for the Republic.
Whilst the MAS has warned that a more ‘severe global slowdown cannot be discounted’ and that the economy will grow ‘below potential into 2009’, the projects for 2009 have largely already been committed to, and look set to continue. It is the decisions and investments that will unfold during 2009, which may trigger a slow-down more prevalent in the Construction industry in 2010 and beyond, as repercussions occur with a time lag.
Outside of Construction industry, the prospects for a recovery in the latter part of 2009, hinge largely on the recovery and performance of the key global players, particularly the US as Asian exports are highly dependent on these markets. Although Asian economies are all reporting slower growth for 2009, with China and India expecting to grow at 10% and 8% respectively, in response to strong domestic demand, slow growth is still growth, and the media have to be careful not to add to the hysteria, and stick with the facts.
With the true effects of the credit crunch unfolding everyday, it becomes extremely difficult to make predictions more than 1 month ahead. We must all keep close attention to the risks unfolding and prepare our arsenal of tools, to respond swiftly when required.
We all await poised to hear how the upcoming budget, due for announcement in February 09 will deal with the current downturn. The Singaporean government seems to be taking a holistic approach, by expanding investments into re-training, up-skilling, educating and investing in R&D, whilst maintaining a favourable business climate. The focus is on supporting the local workforce to remain employed, or re-train/re-skill candidates for inclusion for jobs in sectors where there is still stable demand.
The Singapore government maintains that there is a critical need for local and foreign talent. As far as the current Construction and Oil & Gas projects are concerned, as well as those in the 2009 pipeline, that notion seems to be supported.
Current Location: Singapore
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