The job market in Asia is looking stagnant in the near term with most major economies including China, Japan, India and Singapore struggling to maintain job growth in a highly competitive environment…
By Kumar S
According to China’s Ministry of Human Resources and Social Security data, the job offer ratio to college graduates seeking employment in China’s 100 biggest cities for the March-June period is 1.05. However, some media reports estimated the unemployment rate among young college graduates range from 4% to over 30%.
However, recruitment experts expect the Chinese job market situation to improve on the back of Chinese companies looking to expand their businesses domestically and overseas.
Landing employment is becoming more competitive in China too. According to a recent Nikkei Asian Review report, Chinese companies are actively recruiting people who hold postgraduate degrees. The trend is to hire people with more experience and accomplished resumes creating an entry barrier for new graduates.
Likewise, recruitment challenges in the Singaporean job market remain too. According to Singapore Business Federation CEO Ho Meng Ki, growth is expected to remain lacklustre due to high operating costs and onerous foreign-worker policies which impede business growth.
Economic activity in Singapore appears to be uneven across various sectors. Total employment fell for the second quarter in a row in the April to June period, with 8,400 fewer workers according to a recently released Government data report. The manufacturing sector saw employment fall for the 11th consecutive quarter, by 2,500. In construction, employment fell for the fourth straight quarter by 9,500, while the service sector added 3,400 workers, excluding maids.
In India, the debate on job creation refuses to die down with conflicting reports. There is no comprehensive government data to give a clear picture. While one report published in August dubbed the Indian job market optimistic in comparison to its other Asian peers another report suggests otherwise.
A recent report by Quartz says the number of formally employed Indians may have fallen by 0.1% from 406.7 million the previous year to 406.2 million financial year 2017-18 (April-March). The report quoted findings from the Centre for Monitoring Indian Economy (CMIE), a think tank tracking business and economic data.
The CMIE report says no jobs were added in this financial year. This report contradicts government claims on jobs numbers of 3.11 million jobs added between September 2017 and February 2018 based on employee payroll data. CMIE had disputed that with its own 1.8 million number, for 2017.
Challenging times in the Indian job market may be attributed to demonetization and the new Goods and Service Tax (GST). The twin shocks did not only result in huge job losses but affected the investment environment cycle as a whole.
CMIE data shows investments in projects plummeting by 38.4% in 2018. The completion of new ones fell 26.8% over the previous year and foreign direct investments (FDI) falling by 15%. The current financial year is set to create more problems with an erratic monsoon, rising crude oil prices and a sliding rupee.
Another major economy, South Korea has also cut its outlook on the job market lowering the forecast to 180,000 jobs creation this year from the 320,000 jobs it forecast in December 2017.
In South Korea, the unrest in the global trade and financial instability may make matters worse. The Korean Government expressed concerns over the situation of low income groups and seniors, who have been hit the hardest. The job market has suffered significant blows more owing to the decline of domestic labour-intensive industries such as auto manufacturing and shipbuilding.
Among the top Asian economies, Japan is a standout however, with a recent Government report suggesting availability of jobs rising to its highest level in 44 years in 2017.
While the unemployment rate saw a seventh straight fall in the previous year to 2.8 percent, the lowest since 1993, raising the job-to-applicant ratio to 1.50 in 2017, the situation points to a growing short supply in the Japanese labour market.
Domestic and international factors
Not enough job creation can be attributed to global and local factors. The rising tide protectionist sentiment from advanced economies and the recent trade tariff wars between the US and the EU, Canada, China and India may also be a contributing factor. There appears to be a growing a trend in some countries to increasingly give preference to local talent rather than hire offshore.
For example, the job markets in Hong Kong and Singapore are facing challenges with cost pressures prompting companies to hire local candidates more. Up until five years ago, both countries were offering more white-collar jobs to expatriates from the EU and North America. There has also been a rise in demand by recruiters to hire candidates who can speak both English and Mandarin or Cantonese.
Growth by sector
According to consulting firm Randstad, automation and digital disruption is expected to impact sectors such as Banking and financial services, construction, property and engineering, human resources and information technology the most in South Asia.
The Chinese and Hong Kong job markets will see a demand for administrative and secretarial positions primarily in the financial services industry, life sciences, FinTech and technology sectors. These jobs will be in Government and the private sector.
In Singapore, employment growth is expected to come from human resources and learning and development sectors.
In India, jobs generation is likely to happen in the private sector, especially through start-up incubators.
There appears to be a trend by some corporations in South Asia looking to expand operations in smaller towns as employment growth in bigger cities start to stagnate.
While job creation remains a challenge, competition in the job market has significantly increased with the availability of more domestically qualified candidates, as well as rising expectations of candidate capabilities.
Asians going abroad to work or study are now returning home in droves. Their exposure to offshore markets combined with multi-lingual skills makes them a prized catch. The demand for multi-lingual candidates is expected to increase in the coming decade.
Companies are looking at building better employee experiences with a robust employer-employee relationship to promote competitive and desirable work cultures in Asia.
The high attrition rate among employees can be a worry for companies where demand outstrips supply and Japan is a good example in this regard. According to recent 2017 survey by the Japanese Ministry of Economy, Trade, and Industry, more than 70 percent of the working age population aged 30 to 59 were either considering changing jobs or had already done so.
As a result, many major companies in Asia are taking steps to retain and cultivate talent. Alibaba’s development program appears to be leading the way with its Alibaba Global Leadership Academy (AGLA) designed to cultivate succession planning for Alibaba leadership teams.