The smart HR professional's blueprint for workforce strategy

White paper: Jan '10

By: Staff Journalist, Singapore
Published: Jan 01, 2010

Contingent workers underutilised in Singapore

Singapore – Sixty-four percent of employers in Singapore say they do not view contingent labour as an integral part of their organisation’s workforce strategy. This is higher than the Asia Pacific’s average of 58%.

Among the 635 Singaporean employers across seven industry sectors surveyed by Manpower Singapore, employers in the Public/Admin Education sector (47%) came up tops for recognising non-permanent workers as being the key to workforce strategy. Services sector employers (72%) were least likely to recognise contingent workers as an important piece of their workforce strategy.

The paper defines contingent workers as temporary employees, outsourced workers, contractors and consultants.

Peter Haglund, country manager of Manpower Singapore says that companies should leverage on the use of contingent workers as it provides them with several benefits. First, it allows companies to gain access to people with scarce, specialised skillsets, outsource non-core business functions, try out candidates before hiring them for full-time positions as well as provide for long-term workforce flexibility.

Singapore companies are also most likely to use contingent workforce to help complete work during peak seasonal periods, with covering for employees on leave coming in as the second most popular reason.

However, in light of the recession and employee layoffs, Haglund says that the reasons for using contingent workforce as a resource for covering maternity leave or to meet seasonal demand, will soon be evened out by other factors. “Companies that balance the use of contingent workers can gain competitiveness as they will have the right set and the number of skills when they need them. However, to achieve this, a proactive and structured approach is required,” Haglund adds.

Manpower suggests that in order to take full advantage of opportunities in the recovering economy, employers will need to view contingent workers as a valuable strategic asset, rather than a practical resource.

Primary reasons for using contingent labour

Singapore

Asia Pacific

Complete work during peak seasonal periods

20%

17%

Cover for employees who may be on leave

13%

4%

Screen/”test drive” candidates for permanent positions

4%

3%

Provide longer-term workforce flexibility

3%

3%

Source talent quickly that requires specialised training

2%

5%

Work with limits imposed by HQ during hiring freeze etc.

1%

3%

Outsource tasks not part of core business

4%

1%

Let an expense become a direct cost

1%

1%

Other

0%

15%

Do not use contingent labour

53%

48%

Source: “Rules of engagement: Harnessing the potential of the contingent workforce”, Manpower Singapore

 

Technology companies still cautious

Asia Pacific - Technology companies in Asia Pacific are trying to control cost increases despite the fast economic growth in the region. Although many firms view retention as their top priority for the next one year, cost-control will still be the focus for many HR practitioners. As a result, salary increases in 2010 are expected to rise only in low levels.

A recent “Staff Turnover and Employee Communications” survey by Aon Consulting’s Radford surveyed 119 technology companies in Asia Pacific and found that the economic downturn has affected technology companies in Asia quite badly as more than half of respondents reported a decline in revenue from October 2008 to June 2009.

Across-the-board, reductions in headcount were reported among 31% of participants across the region. Restructuring of operations and layoffs based on performance were the most common reasons for the cutbacks. As a result of the layoffs, about two-thirds of those engaging in redundancies reported a decline in employee morale.

In response to this, the survey, which was released in September 2009 found that HR managers are changing their focus towards concentrating on maintaining employee morale and productivity in the next 12 months (22%). On the other hand, retaining key staff is still the number one priority for 29% of respondents.

Despite the revival of economic growth along with the continued emphasis on cost- control, salary increase in technology companies across Asia-Pacific is anticipated to rise modestly in 2010 in the range of 2% to 7%. The highest average increases are expected in Vietnam and India (6.6%) while the lowest will be in New Zealand (2.1%) and Japan (2.4%).

Source: Staff Turnover and Employee Communications survey, AON Consulting’s Radford

 

HR lacks faith in employees

US - More than half of global HR leaders polled are doubtful about their employees’ readiness to meet the organisations’ goals despite identifying that retaining top performers and investing in technology as solutions.

People management solutions provider Softscape in its fifth annual executive report “State of Global People Management” said 56% of global HR respondents do not believe that their workforces are “adequately prepared” for future organisational growth. However, HR leaders have identified “limiting top performer flight to facilitate growth” and “getting the most out of HR technology investments” as the keys to overcome this challenge.

While improving internal talent mobility has been suggested as an effective retention tool, 26% of HR leaders have yet successfully measure the business impact of people management programmes on their organisations. This is likely to devalue HR’s effectiveness because based on the aggregation of twelve key HR and business operating metrics, companies that invested in good people management tools outperformed those who didn’t by 37%. Similarly, organisations that invested in HR process, data, and technology integration have significantly outperformed organisations that have not invested.

HR respondents also said using a single “best-of-breed” platform to facilitate people management strategy has a significantly higher business value compared to using delivery approaches such as ERP/HRMS or manually integrated multiple systems. An integrated HR technology solution has been predicted to gain the highest growth of 182% among all IT solutions.

“After a difficult 2009, it is now imperative that HR leaders eliminate their recession-driven downsizing and ‘hunker-down’ mindset,” said Mark Smith, CEO and EVP of research at Ventana Research firm. “Organisations that attack these challenges head-on by developing and executing a complete people management strategy will achieve distinct competitive advantage.”

 

Companies featured:

  • Manpower Inc
  • AON Consulting

Manpower Inc Related Stories:

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