Unless you’ve been in quarantine for the past 12 months without access to TV, Wi-Fi, mail or phone, you may have noticed that job markets in Asia were red-hot last year, which was partly fueled by economic rebounds across the region.
This was particularly the case in Hong Kong and Singapore where a marked uptick in hiring began in February. The China market simply continued its strong trajectory from the year before, but from April things seemed to pick up a notch. Recruitment companies of all shapes and sizes have had record years and, within many companies, plenty of new faces replaced departing ones.
Well, hold onto your hats because the talent acquisition bull run isn’t over yet. Prepare yourself for The Great Resignation 2.0.
With bonuses being paid over the next month or so many people who didn’t make a move last year will be looking to jump ship. Traditionally, Q2 is when global job marketstypically reachtheir peak and this year will be no different, except with plenty of added sauce.
There are various factors coming together to create the continuation of this perfect storm. Talent is about to become even more difficult to find.
Apart from the continuance of the economic rebound and increasing business confidence, which will ensure a robust pipeline of jobs, there continues to be dissatisfaction among professionals with their employers in Asia. In fact, many have one foot out the door. Various surveys have suggested most hiring over the last year was to do with replacing employees, more so than business growth. But as we go through 2022, both will heavily feature as causes.
Unfortunately, companies have become complacent, and many have neglected their retention strategies over the last two years and, on top of this, the pool of available talent is shrinking rapidly.
There are a lack of professionals coming into markets like Singapore, Japan, mainland China and especially Hong Kong due to the effects of the pandemic. In some markets strong talent has been leaving permanently as a result of visas not being renewed, difficulties in flying overseas to see loved ones in their home countries, as well as, in the case of Hong Kong, negative perceptions of what the future holds. These trends will only continue to gather momentum this year.
"It has become incredibly difficult to find strong talent and many high-performing employees are being targeted regularly by headhunters. If salary increases or bonuses aren’t up to scratch, these calls will be taken more seriously."
As a result of what has transpired so far, job markets are showing signs of stress. Salaries are going up and expectations of robust hikes to move to a new company are far higher than even six months ago. In some functional areas it has become incredibly difficult to find top talent and many high-performing employees are being targeted regularly by headhunters. If salary increases or bonuses aren’t up to scratch, these calls will be taken more seriously.
Companies are also ‘buying back’ employees that resign, offering large increases in base salary and promises of bigger jobs and titles. Jobseekers are interviewing with numerous organisations at the same time, receiving multiple offers and, with it, their compensation expectations are rising. These are common enough occurrences in a hot job market, but I haven’t seen this volume in my 24 years working as a headhunter in Asia, and more is to come.
The Great Resignation in North America and Europe has been well documented. It has partly been fueled by employee sentiment that remote working has made moving jobs easier than in pre-pandemic times. No physical relocation is required for many job moves and people can now access thousands of new roles which were previously off-limits geographically. But this has been less of a factor in Asia as the uptake of working from home (WFH) has been less than on other continents. Some companies have voiced an openness to base roles in other cities in Asia, but this has been rare, and ultimately the original location for the role has won over.
What is happening though in Asia, which mirrors another contributing factor for The Great Resignation in North America and Europe, is people wanting to move on from organisations where they have experienced an unhealthy work-life balance and toxic work culture. Many have simply been feeling burnt out having not taken much time off. And because colleagues have been working non-stop, that has put pressure on others to just keep working too, leading to a vicious circle of exhaustion.
Like I mentioned earlier, many organisations have neglected their retention strategies over the last couple of years and CEOs have not been listening to their employees, many of whom have voted with their feet. HR functions had outlined this as a risk, but many CEOs didn’t heed their warnings. Some companies have reacted to changing candidate expectations in recent months and have turned on the charm offensive, but for others it’s ‘too little too late’ with true colours having already been exposed.
Last year, many people were able to step off the never-ending hamster wheel (for a brief moment) and, upon reflection, decided that they didn’t want to get back on. This might have led to a career break, a change in lifestyle or a new career. This phenomenon is being led by Millennials and Generation Z and, in China, was seen through the rise of the ‘tang ping’ movement with young workers reacting against the 996 working hours/rat race system. These trends will only become more established as we head through 2022, further disrupting talent pools.
Just as in Europe and North America, professionals in Asia who are moving organisations are leaving to join better companies that they perceive to genuinely care more about their employees and have more positive, respectful cultures. Research by consulting firm The Josh Bersin Company found that only one in seven companies in the US would fall under this bracket of, what they term, “irresistible organisations."
"This rise in expectations of what people want from employers was happening pre-pandemic but the last two years has acted as a catalyst and sped up this trend exponentially. People are expecting more."
This rise in expectations of what people want from employers was happening pre-pandemic but the last two years has acted as a catalyst and sped up this trend exponentially. People are expecting more. During the worst moments of the pandemic, people worried about their health and their loved ones. They were also concerned about the impact the pandemic would have on their finances. As a result, there’s now an expectation that a good employer should help to alleviate such concerns and offer support. Many employees are basically leaving to go somewhere with a positive culture where they feel this support and, in effect, are more valued.
What can leaders and organisations do?
CEOs need to be far more engaged with their company’s talent strategy. Many say that talent is their top priority but from my experience not many walk the talk.
Leaders should assume every employee is looking for better opportunities. Employee engagement programmes need to be ramped up and the focus of managers needs to be on listening and supporting their staff. Empathy is critical. Career progression and succession planning need to be taken more seriously and time and money need to be invested. Internal mobility needs to be facilitated through upskilling staff. Retention is key given the cost of talent acquisition (take Amazon for example, which spent around $4 billion USD on hiring in Q4 last year) as well as the cost of lost productivity. Research suggests it takes between six and nine months to onboard someone to be fully effective).
Far more attention needs to be given to employer branding. Your reputation in the market counts for a lot when it comes to hiring. Word can easily get around within Tokyo, Shanghai or Singapore and, if staff are heading for the exit, people will know about it.
Talent acquisition processes need to be far slicker. It astounds me how many companies still fall short in this department with hiring processes leaving a trail of appalling candidate experiences. Long gaps between interviews, interviewers not being adequately trained, prepared or joined up and interview processes that drag on for weeks with too many interviewers involved are all putting candidates off. A lack of respect and compassion for candidates can have dire consequences too - peeved candidates will talk to each other about their experiences. Onboarding processes have been found to be lacking in many organisations too - not a great start to retaining talent in a hot job market.
More investment needs to be put into well-designed benefits programmes including well-being programs and digital tools to improve workplace productivity and wellness. Working from home is definitely here to stay and companies that don’t recognise this and offer flexibility will suffer the consequences. Research from late last year conducted by three economists, Barrero, Bloom and Davis, pointed to an average of 1.3 days a week being spent working from home in a post-pandemic world. This number is 25% higher than when the question was asked 12 months prior, so it might rise even further over time although, as mentioned in this and previous articles, professionals in Asia are less attracted to WFH compared to other regions. Listening to individuals is key. Ensuring staff are taking time off as holiday is essential as well. Many have neglected to take them over the last two years and this needs to change. Last year, LinkedIn shut down for a week to force people to have a break and Nike gave their employees a mental health week off in August.
"Organisational attractiveness is a high-level C-suite leadership issue. Retention and talent engagement can’t continue to be an agenda point that is left for HR to champion and push uphill."
Organisational attractiveness is a high-level, C-suite leadership issue. Although some things will return to normal, like the ability to travel and be geographically mobile, I feel this issue of organisational attractiveness is here to stay. The next generation of leaders will learn that taking care of employees will become a key priority of what they do. Simply put, retention and talent engagement can’t continue to be an agenda point that is left for HR to champion and push uphill.
Richard is a Managing Director based in Hong Kong. He focuses on senior-level mandates across all industries. With 26 years of executive search experience, Richard has specialised in recruiting Human Resources professionals in Asia since 2001.