Labour shortages demand new retention strategies

Updated: Dec 30, 2021

YEAR IN REVIEW: Although the Covid-19 pandemic is slowly receding, it created lingering effects on business and the HR profession throughout 2021.

One such impact has been the exacerbated shortage of skilled labour in almost all labour markets across Southeast Asia.

While the pandemic put many workers into unemployment, there is now a shortage of workers as economies begin to revive.

A report by the International Labour Organisation revealed that there were 10.6 million or around 3.2% fewer workers in the labour market in ASEAN countries in 2020, compared to the previous year. The employment gap was expected to end in 2021 at 9.3 million, whereas the ILO predicts that there will be an employment gap of 4.1 million by the end of next year.

There are several reasons behind the ongoing labour shortage we are faced with today, and they are mainly caused by the Covid-19 pandemic.

One of the apparent reasons is that many employees have been afraid of contracting the virus, and avoided reporting to their physical worksites, while unemployed workers chose to only apply to jobs that offered remote working. This was further revealed by a Straits Times study that surveyed 500 Singaporean respondents. It found that 73% were anxious about global pandemic diseases, Covid-19 in particular.

But there are other reasons that go beyond the pandemic and have all worked to create a paradigm shift within recruitment circles.

Many countries provided stimulus payments to workers during the height of the pandemic, however, the assumption that these unemployment checks kept people at home is also not believed to be a reason for the ongoing labour shortage.

Rather, the pandemic has given workers an opportunity to reflect and re-think their careers and priorities. In an instant, flexibility became more important than mere salary increments.

In a 2021 study by Ernst & Young, 32% of workers from across Southeast Asia said they preferred to work anywhere and anytime with complete flexibility. Some 29% said they would like to work remotely, while 23% preferred a hybrid working arrangement. Only 15% of the respondents indicated a preference to return to working full-time from the office.

The ongoing travel restrictions have been another reason for the labour shortage phenomenon. Suddenly, it became difficult and often impossible to hire workers from across borders, forcing many firms to rethink their hiring strategies.

There were two ways that companies in the Asia Pacific dealt with the shortage and restrictions. Many firms looked into managing their internal talent by upskilling and training their in-house talent to cover the labour demand of their businesses. Other firms quickly moved to adopt the remote working style for their staff, which enabled them to hire foreign workers without having to deal with travel restrictions.

Singtel, for example, aimed to deal with the labour shortage front on, through training its employees and prioritising their mental wellbeing during the course of the pandemic. It was successfully able to train existing employees by improving and transforming the technology they use, as well as using their “High-tech + High-trust = High Touch” approach.

Singtel also rolled out its #CURIOUS digital learning platform over the course of 2021, featuring over 10,000 courses available in modular, bite-sized digital formats over both mobile and desktop. This enabled employees to be moved around to different departments with ease, rather than hiring new or foreign talent.

Another strategy that firms co-opted was to hire foreign talent through remote working engagements.

Many of these changes that the HR industry had to adapt will also remain important in the coming year. Studies show that remote and hybrid working are becoming the preferred working style, even after the pandemic subsides. Additionally, many firms may take a few years to recover financially from the impacts of the pandemic, resulting in managing internal talent to keep costs low. Hence why organisations should look into creating training programs and effective communication with employees to retain their talent.

This feature was extracted from Chief of Staff Asia's report on 2021 in Review: Talent back to the forefront. For further coverage, and access to the full report, please see any of the below links:

2021 in Review: Talent back to the forefront (full report) December 23, 2021

Talent returns to the forefront of HR agendas (news highlight) December 24, 2021

Labour shortages demand new retention strategies (feature) December 27, 2021

Workplace restrictions squeeze talent further (feature) December 28, 2021

Digital disruptions became the norm (feature) December 29, 2021

Looking back at HR Technology in 2021 (feature) December 30, 2021

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