There will be plenty of challenges for Singapore next year including the impact of restrictions on hiring overseas candidates, managing skill shortages in key areas and the need to create innovative strategies to achieve greater staff retention, according to specialist recruiter Hays.

While Singapore’s relatively young population is the envy of many countries grappling with an ageing workforce, it is harder to source for sufficient local talent to fill roles in a number of areas of skill shortage including senior roles

The economic forecast is more subdued but this is unlikely to alleviate talent shortages in key areas. A focus on staff retention and labour market flexibility is needed next year as well as an openness to inward migration so that employers can react swiftly to signs of stress in the labour market.

Here are four of Hays’ top 10 talent trends for next year:

1. Economic outlook

While the US fiscal cutback and the Eurozone problems will continue to impact the success of several sectors here including manufacturing, which accounts for a quarter of the Singaporean economy, Singapore was named the world’s second-most competitive economy in the Global Competitiveness Report 2012–2013. Published by the World Economic Forum, the report also ranks Singapore’s public and private institutions as the best in the world for the fifth year in a row.

2. Foreign worker restrictions

The Singapore Government has taken several steps to slow the intake of foreign workers.

These include revising the rules for acquiring employment passes, such as raising the minimum salary threshold for the two main types of work passes for skilled foreign employees.

The Government will also introduce a “calibrated reduction” in the ratio of foreign workers hired by companies in the manufacturing and services sectors to curb dependence on them.

3. Skills shortage

Singapore’s jobless rate fell to 1.9 per cent in the last quarter this year. A skills shortage exists in the manufacturing, oil and gas, IT, accountancy, sales and marketing and the services sector. With restrictions being placed on hiring from overseas, competition for candidates will be intense next year.

4. Financial services growth

According to the UK-based Centre for Economics and Business Research, the world’s financial centre will have moved east by 2015. Hong Kong is expected to have more financial services jobs than London or New York with Singapore close behind. However, Singapore’s role could be threatened if not enough financial services candidates are available.

Next: Retention strategies and social media among top trends for next year