The latest 2023 labor market insights for Asia-Pacific

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With the economic uncertainties this year, businesses have been laying off employees, adjusting budgets and preparing for the worst. Now that we are past the halfway point in the year, the APAC labor market is still showing some interesting statistics. To shed some light on the current market, our Regional VP for Asia-Pacific (APAC) Sreejith Pilassery has some updates and takeaways for you.

Market overview

If we consider the macro-level data, the labor market in APAC is continuing to face headwinds. According to LinkedIn's State of the Market report for June, hiring is down in all major APAC markets. There's a higher impact on India and Singapore, with an overall decline of 36% and 26% respectively, and Australian and Indonesian markets declined by 23% and 15%. The data regarding candidate behavior indicates that labor markets are cooling down, leaning towards an employer's market. Australia and Singapore have the highest percentage of applications per applicant, ranging from 25% to 28%, and India is at 13%. This trend is expected to bring down overall wages to pre-pandemic levels. While the IT and financial services sectors are yet to recover, we're seeing positive trends in construction, heavy engineering and automobile sectors. With this in mind, there are five takeaways to consider:

Global Capacity Centers are on the rise

The calibration of the global supply chain and the term "friendshoring’’ by the U.S. trade secretary is pointing towards recalibration of the supply chains. From an IT perspective, global capacity centers are rising and will take advantage of this. Contrary to offshoring lower-level IT work, offshoring GCCs now work on cutting-edge technologies today, including AI and ML. Some reports suggest that IT innovation has increased by 35% in these centers. Some larger corporations are naming these facilities as innovation centers or R&D units. India is leading in this sector. Malaysia and Indonesia are also sought after for data centers and other infrastructure capabilities.

Hybrid work is here to stay

Though the pandemic is no longer a threat, hybrid work is becoming more popular among organizations and employees as a middle ground, thus enabling organizations to acquire talent and candidates to get opportunities unavailable in local markets.

No more frenzy in hiring

Organizations now expect staffing companies to find niche talents possessing specialized skills and qualifications, and they seek solutions that align precisely with their unique demands. The demand for top-tier cybersecurity, data science and AI professionals is fiercer than ever. Employee attrition, which fluctuated during the pandemic's uncertainty, has stabilized at an all-time low, gradually regaining its pre-pandemic levels.

Safer jobs in demand

Mass layoffs across the industry are pushing candidates to opt for safer jobs. While we are starting to see more job applications, candidates with higher leverage over the positions are more cautious and are opting for safer and long-term career options.

IT employee costs have increased considerably

A recent report on big IT firms shows that average employee costs have increased as a share of revenue. This can be attributed to increase in hiring of specialized and niche talent as replacements.

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