18 November 2008 @ 07:40 am
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.
23 August 2008 @ 01:43 pm
I felt compelled to write this blog due to a disturbing ‘silent’ but true notion, which seems to exist within the recruitment industry. Many recruiters daren’t not speak of it, most clients daren’t not think of it, but I am about to shatter the illusion which exists within the relationship which exists between Client and Recruiter. Client’s may find this blog disturbing, and Recruiters may challenge my honest view here, however my assertions are not based upon opinion alone, but on basic ‘human nature’ principles, and the basis of ‘human survival’.
Whilst I operate within the Construction, Real Estate and Property realm, generally speaking we are facing a global talent shortage. The ‘War for Talent’ can be put down to several factors, Shortages being caused namely by changing demographics, Baby Boomers ageing, an obvious decline in birthrates and global migration of talent. Then we have the very ‘deliberate’ and enterprising practices such as Global Executive Search (a flowery way of saying Head hunting), cross-border hiring, and recruitment outsourcing, which all affect the ‘movement’ of talent. I wouldn’t go so far as to say they cause ‘shortages’, as these practices may cause a shortage in one area, but they feed another area. So I opt for the word ‘movement’ for these particular practices. Naturally others crucial factors such as sophisticated technologies also come into play, as they affect ‘demand’ for human manpower, as many low-skill positions are made obsolete.
Ok so without digressing too far from the main point of this blog, I have presented macro-level reasons for talent shortages and movement, I want to take this a step further and discuss one particular strand of talent ‘movement’ reasons at micro level. Perhaps clients (and even consultants) haven’t considered the point that Recruiters play a huge part with causing movement shifts where cross-border recruiting and migration is concerned. Their actions contribute directly to candidates moving from one company/country to an another, and on a more serious level, recruiters actions can seriously distort the ‘average’ salary values in a given period, as many candidates (speaking mainly white collar workers here) are given a % increase in salary to move, or worse offered a % increase to stay, thus the artificial increase in salary can distort the given average for a region in a give period, until data is collected over a longer period of time to display an average.
Anyhow, you are probably wondering where I am going with this, but I will tie all this assertions together later in the blog, at the moment it is important to present some facts, so you have a good understanding of why I am about to make my point below.
Over the years I have had the pleasure of working with MNC’s, SME’s and Start-ups. I have personally recruited talent for some of the most iconic and ground breaking construction and infrastructure projects spanning 3 continents. I don’t want my medal just yet, but as a recruiter I have worked on ‘filling gaps for clients, which have directly impacted on my client being able to complete their projects. Without my Architect on that particular phase of the project, what would the impact have been to Mrs Client X? Without my Health & Safety Manager on that Petrochemical project, would the project have been ‘approved’ by authorities in time for completion, for Mr Client Y, and without my Commercial Manager on the Casino project for Mr Client Z, would the cost savings, final accounts and cost litigations have been completed in time for handover? I actually don’t know the answers to these questions, but what I’m trying to point out, is that Recruiters don’t just ‘fill a position’ or ‘recruit a body’ or ‘find someone a job’. These are the ‘superficial’ solutions a recruiter is involved with, and is often the level which ‘Clients’ operate at. What I mean is, too many client’s view Recruiters as a necessary evil because they believe Recruiters perform the aforementioned ‘superficial’ tasks, for what they believe is an inflated fee. I totally disagree with these viewpoints.
For me a Recruiter is engaged to ‘fix problems’ caused by talent shortages. When I’m given a brief from a client, I ask them what the ‘cost’ to their business will be if they ‘do not’ find this person in a month, 3 months, a year etc. I ask them to describe the problem caused (if it is not already present), if they are to not fill their man power requirement on time? Usually the answer is a hybrid of the ‘project will fall behind schedule’ and this will directly ‘impact the cost’. Readers please note, the construction projects I work on are multi-million dollar projects, just one day delay on a projects of this scales results in thousands of dollars of loss, straight off the bottom line! This makes my recruitment fee look like a puny ‘raisin’ as far as costs are concerned.
It’s a simple shift in mind-set, too many clients focus on the ‘cost’ of the recruitment fee, instead of the ‘cost’ impact to their project if they don’t find this person. Usually the people thinking like this, are HR professionals, or middle management, who can’t ‘see past’ the recruitment fee. However scarily enough, some Directors and MD’s also operate on the superficial levels when engaging a Recruiter. That said however, many Directors, MD’s, Business owners have a more strategic view of a business than middle management, they are more likely to appreciate the ‘cost’ to their business if a project falls behind schedule, or if they can’t ‘win’ a tender due to shortages of man-power. Then and only then does the recruitment fee become irrelevant, as the cost of NOT having that person on board, is far greater than the cost of hiring them in the first place. It is these supply/demand dynamics which has made Recruitment a multi billion dollar industry worldwide.
To me (and other professional recruiters), it is hugely disappointing when a Client can’t see the value to be added by a Recruiter, not just with recruiting talent, but with providing overall market advice (often for free). A professional Recruiter (note I use the word professional, as our industry is full of people who give our industry a bad name and I can’t call those individuals ‘professional’) can seriously ‘add value’ in many different ways. As I tell my good clients, I am the ‘eyes and ears’ on the ground, as to what the localized market is doing, I can advise on salary movements, recruitment drives/campaigns, and market shifts, perhaps more interestingly though I’m able to provide competitor analysis (for very good clients only), and give clients ‘exclusivity’ on candidates, again this is reserved for the premier clients only. None of these ‘Consultative’ approaches cost anything extra by the way, it’s just ‘human nature’ that you look after the people who look after you. I have no qualms with going the extra mile for clients who value our service and treat us with the same respect we give them. Now how about the clients who don’t operate on a win/win basis?
Perhaps now is a good time to refer back to the title of this blog ‘Don’t make an enemy out of a Recruiter’ . When I first started out in recruitment, I recall making a routine call to a client, regarding an upcoming residential project they were running. I clearly caught this Director at a ‘BAAAAD’ time, as just as I had got my name and company out of my mouth, and he proceeded into a huge shouting spiel, littered with the four letter word, coughing out expletives about how he ‘hates Recruiters’, how we are the ‘Scum of the earth’, ‘Shit at our jobs’ bla bla bla bla, then he put the phone down on me. Naturally I was speechless, but actually on a more ‘humane’ level, I was actually quite hurt. In those inexperienced days, I took rejections personally, and aggressive stances such as this clients comments, could move me to tears. I’m pleased to say I handle such situations far better these days, but it took me a while to shift my mindset.
My change of mindset is directly related to the title of this blog. It took me a while to understand that I actually didn’t ‘need’ to work with everyone. In fact I began to understand, and respect my own role as a Recruiter far more. I began to appreciate that there are generally three broad types of clients, Client A) you work hard on and take on their problems as your own, and then there is Client B) whom you utilize for finding talent for your Client A, and lastly there is Client C) whom you haven’t discovered yet, or is unaware of your services.
The interesting thing about these groupings is that they are dynamic, Client A could become Client B and vice versa, nothing is fixed and nothing is given. Now for the interesting part, Client B is usually a client who has been given the opportunity to work with you, but doesn’t wish to, or is a typically a client who favours another consultancy, or is a client who has annoyed the Recruiter at some stage in the past. The problem that all the Client B’s have is that could be in danger of becoming prime targets for having their people head hunted by Recruiters. After all they probably haven’t given time of day to the Recruiter, so the Recruiter inevitably has no loyalty or regard for the client.
Becoming a prime ‘hunting’ ground for a Recruiter is bad news for a company. Recruiters have the power and influence to target candidates and offer them alternative employment with competitors or on projects overseas. Putting it bluntly, they could potentially ‘rip’ the heart out of an organization by targeting key star players.
Indeed I know one such Recruiter who had no shame in admitting that a particular Contractor had been dishonest with him, and taken on a candidate through another agency, despite him being the ‘introducing’ agent. From that point onwards, this particular recruiter mapped out this Clients entire office in terms of staff names. Over the next 3 years, he set out targeting the employees of this firm with alternative options. He even boasted that so far he had a 60% ‘success rate’ of recruiting people from this client, and luring them away with better opportunities. Did the client know why his staff were leaving? Did the client realise who was behind his staff attrition rates? Did the client realise that his company was delibrately being targeted so aggressively by one individual? And lastly if the client was aware of all of the above, did he/she realise that this situation was caused by his dishonesty in the first place?
Now I’m not suggesting that this is the right or wrong way to go about things, however in the bloody world of business, I feel we must be careful, fully aware and totally accountable for our actions. Humans are fragile creatures by nature, and all sorts of feelings are conjured when one feels ‘hard done by’. Whilst I can appreciate (but not understand) that some Clients don’t feel Recruiters add value to operations, a Client has to be careful how they portray this message. Said in the wrong way, to the wrong person, on the wrong day, and you could end up being moved into the ‘Client B’ pile, and before you know it, you could be shedding staff quicker than Paris Hilton’s strip tease.
This topic is by no means over, I will continue with more damning examples from the recruitment industry in a separate blog. For now I wanted to lay the foundations for a debate on this topic. I know Clients will have their stance and many ‘honest’ Recruiters will agree with my assertions. The overall message I’m trying to put across is that in today’s day and age, where there is a very real global talent shortage, causing a ‘war for talent’, shouldn’t Client’s be rallying their allies? A Recruiter can be an very important ally to a business, whether you recruit through them or not. Make an enemy out of a Recruiter however, and you could find your business being plagued by a ‘silent disease’, causing you to loose your star players. If you are smart you will find out the cause of this problem and remedy it before the problem causes irreversible damage.
All comments are welcome
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