Singapore: Firms cautious about hiring in 2013

 Fresh graduates and other new entrants to the workforce next year may find it tougher to land a job, as a survey of companies here has shown bleak hiring prospects in the first three months of 2013 and economists expect the tepid hiring to continue well into the year.

According to a survey of 654 employers conducted in October by employment consultancy Manpower Singapore, eight in 10 firms said they do not intend to make any changes to their headcount in the first quarter of next year.

In comparison, 13 % intend to hire, while 3 % expect to reduce the size of their workforce.

While a separate survey of 505 companies based here by Hay Group found that 58 % of respondents plan to increase staffing levels over the next 12 months - compared to 50 % at the same time last time- SIM World Education economist Tan Khay Boon reiterated that companies will be extremely cautious about the bottom line when it comes to hiring.

“That’s why they prefer to hire the worker at the same cost or, better still, at the lower cost instead of expanding the cost to get the workers,” he said.

Manpower Singapore Country Manager Linda Teo added: “Clearly, we’re seeing extra employers taking an increasingly cautious approach to hiring and evaluating world market conditions before taking the next step.”

Economists noted that the murky world economic conditions are not going away anytime soon.

“The cloud overhanging the world economy has not cleared from now on. So in terms of companies’ hiring plans, it’s probably now on a holding pattern. Companies will prefer to take a wait-and-see approach,” said DBS economist Irvin Seah.

CIMB-CK regional economist Song Seng Woon added: “Graduates need to be realistic that the market isn’t as strong as it was before, so accordingly they would have to moderate their forecasts.”

Nevertheless, there will be openings in specific sectors, such as construction and finance, said Mr Song.

“For example, in banking services, banks are cutting back but still selectively hiring in segments. They may not be hiring as a lot of frontline people or on the operational level, but they may be looking to hire in other departments, such as in wealth management, because there are still plenty of wealthy people who are getting wealthier,” he said.

According to the Manpower Singapore survey, sectors with good hiring prospects were finance, insurance and real estate, mining and construction, public government and education.

On wages, the Hay Group survey estimate salaries to go up by 4.4 % next year.

The Monetary Authority of Singapore has projected headline inflation to be between 3.5 and 4.5 % next year.

 “We will almost have zero wage increase - but that remains to be seen. I personally think that it is going to be negative again. Singaporeans are losing purchasing power, because of slower increase and higher inflation,” said Seah.

Performance-based bonuses next year are as well estimate to dip slightly to an average of 2.5 months, as compared to this year’s average of 2.6 months.