While cutting manpower costs to manage rising costs may seem intuitive for SMEs, Tanisha Kochhar, Head of People & Culture, Hugosave, points out that investing in quality employees will actually help in the long-term.
Singapore businesses are expected to fork out an additional S$500mn a year in Central Provident Fund (CPF) contributions for employees following the increase in CPF monthly salary ceiling from S$6,000 to S$8,000 by 2026 announced during Budget 2023. While the increase will be spread out over four years to help soothe the impact on companies, the increase in the salary ceiling for contributions will definitely lead to a rise in business and manpower costs in the long run.
For small- and medium-sized enterprises (SMEs) which are typically more sensitive to cash flow and profitability matters, cutting manpower costs to manage rising costs and economic uncertainties seems intuitive. However, investing in quality employees will not only help businesses better manage costs but also drive growth.
Talents are crucial assets to SMEs and startups. HR practitioners need to prioritise hiring candidates with the right fit for the company, i.e. attitude, skills, talent, and experience, rather than be hindered by cost considerations and limitations because of the rise in CPF monthly salary ceiling.
That is why at Atlas Consolidated, a local fintech company behind the Wealthcare® and savings app Hugosave, the practice and philosophy is to hire based on merit to ensure the best talents are in place to deliver a world-class product that will elevate lives.
Building an A-Team with shared values and goals
The traditional process of focusing exclusively on a candidate’s work history or academic qualifications may not be the best or most effective way to find suitable talents.
Rather, HR professionals should also pay attention to how well a candidate’s personal values and goals align with the company mission and vision, and culture. Here at Atlas Consolidated, we have a practice of hiring employees who share synergies with the organisation.
Our current Senior Manager for Growth and Marketing is one example of how we look beyond qualifications in our hiring process. Despite not being a degree holder or having relevant sector experience in banking and finance when he first joined Hugosave, he demonstrated great potential and interest in our work during the hiring process. Resonating with Hugosave’s mission, he also showed strong alignment with our corporate values. In addition, he understood the pain points of local consumers towards personal finance, digital savings and investing, and believes in the value the product brings to Singaporeans.
Within three years, he was promoted to Senior Manager, Growth and Marketing, and is now responsible for leading the group’s brand and communications initiatives.
Experience is great, but don’t forget to prioritise talent too
Our current Head of Operations first started out in our compliance department. In his time there, he learnt quickly and displayed strong learning capabilities and ownership, rising through the ranks to now helm the company’s operations department efficiently. While having experience is beneficial to a role, we believe in the value of nurturing and developing talent, playing to their strengths, and allowing our employees to pick up new skills to help them grow in their careers.
Talent retention is a two-way street
Attracting and retaining quality talent is a challenge. Companies looking to build a strong team ought to remember that they are not the only ones doing the assessing. It’s a two-way street—these jobseekers are assessing the companies too. People want to work for organisations that are aligned with their values and empower them to pursue an ideal quality of work and life.
The rise in business costs will be inevitable in the long run but we must be careful to not let it harm our hiring processes and strategy, especially for SMEs with a smaller workforce. As we navigate the current uncertain economic environment, taking a talent-first approach to building your team is vital to place SMEs on the path to success. This mindset ensures organisations stay competitive in attracting and hiring the right talents for long-term success.
Lead image / Provided by Hugosave (featuring author Tanisha Kochhar)