TALENT shortage and high attrition rates are now issues weighing on the minds of recruiters and company chiefs in Asia, as companies expand more aggressively in Asian growth markets.
Nearly two-thirds of CEOs based in Asia told consultancy PwC in a survey they face a 'limited supply of candidates with the right skills'. Also, 47 per cent said they lose their top people to competitors.
In a report by boutique recruitment agency Ambition Group, about half of the 200 Singaporean executive respondents said attrition rates have risen in 2010 and have raised the trend as a key concern.
The tight talent pool comes at a time when companies are looking to expand in Asia. PwC says that nine in 10 CEOs surveyed in their global CEO survey are expecting their operations to grow in Asia, with a focus on China and India.
Gautam Banerjee, executive chairman for PwC Singapore, notes that Singapore is also a strong destination for businesses and talent.
Paul Endacott, managing director of Ambition Group Singapore, said the recruitment pick-up was at first driven by replacement hiring in Q1 through mid-Q2 2010. 'But by Q2 onwards, it was attrition that began to drive hiring and investment in key areas that led to a candidate-short market.'
Seven in 10 executives in Ambition's report have seen people wooed by higher remuneration packages from other firms. On average, Singaporean candidates are offered pay packages 10 to 15 per cent higher than they used to earn and in Hong Kong, they can be as much as 20 per cent higher.
About 41 per cent say people leave because of a lack of career opportunities available.
'Attrition is extremely costly to a company. Some research has shown that replacing a person into a role can cost the company 150 per cent of the person's annual salary,' says Mr Endacott.
About 62 per cent of Singaporean executives have to cast their eyes to overseas talent because they are unable to find the right people here.
In banking, Ambition CEO Guy Day finds recruiters tend to pick from other financial hubs like Hong Kong, Japan, Australia.
It gets trickier when the roles get more niche, like in digital marketing, where it's rare to find someone with experience in Asia. Typically, says Mr Day, such companies recruit from the US, the UK or Australia.
Companies are resorting to non-monetary means of shoring up talent erosion. About 65 per cent of CEOs in PwC's survey say they are deploying key employees overseas.
Other popular strategies include retaining workers past their retirement age and tapping more female talent.
'If it's purely money, then its going to be very challenging for companies to retain people,' notes Mr Endacott. 'However, if it's career development that's the issue, companies can invest more in training, learning and do more to improve work-life balance by offering flexible working arrangements.'