October 2023 APAC labour market update: Hybrid work is in
As we approach the end of the year, companies are evaluating budgets and preparing for 2024. To shed some light on the current market and the future of labour in the APAC region, our Regional VP for Asia-Pacific (APAC) Sreejith Pilassery has some key updates and takeaways for you.
Based on recent data, the large regulated markets in APAC (Australia, India and Singapore) have faced a 28-32% decline in hiring. But, if you closely analyze the trends from the past 2 months, you will note a taper in India. It’s also important to note that staffing firms are experiencing margin pressure across almost all APAC markets. As per SIA’s new report, pressure has shrunk to 24% on a 316-basis point. This trend is reported globally (not just in APAC) and shows that gross margins are sensitive to the economic cycle. The Australia and New Zealand markets are seeing a higher emphasis in sales for recession-proof industries to reduce sharp movements. A recent survey stated that up to 76% of companies are taking part in this.
Overall, these trends show there will be a rebound in hiring -- albeit gradual. What else does this mean? Sreejith has five key takeaways for job seekers and hiring managers based on the data and current trends:
Hybrid work is in
While remote work will still remain an option, organisations across APAC are transitioning to a hybrid mode of work. This is a trend we are seeing across all major markets in APAC. In India, hybrid jobs are up by 40% with notable names like Apple, ITC, Nestle, PepsiCo, Airtel and Mercedes Benz moving to a permanent hybrid model.
Global Capacity Centers (GCCs) are on the rise
GCCs are continuing to invest in India. According to a recent report, large American healthcare insurance providers are pushing to have a larger workforce. 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.
No more frenzy in hiring
Organisations 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 an increase in hiring of specialized and niche talent as replacements.
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