Labour market trends Asia-Pacific (APAC) is home to more than 4.7 billion people and some of the largest economies in the world. And because it is comprised of over 50 countries and territories with diverse cultures, languages, and job roles, it is impossible to utilise the same talent acquisition strategy across countries.
APAC by Numbers:
50+ Countries and Territories
2300+ Languages spoken
60% of the Global Population
According to the International Monetary Fund, APAC is also the fastest-growing region in the world and represents a tremendous opportunity for global businesses to capitalise on this diverse talent pool. For this reason, it is essential for organisations to comprehend the region’s skills shortages, demographic gaps, and pandemic recovery challenges.
In this article, we will discuss some APAC labour market trends. In addition, we will discuss the impact of immigration, education, and diversity on talent acquisition in the region, as well as what multinational organisations should be aware of in these areas.
Recovery from the Pandemic Continues to Vary Across APAC
The restoration from the COVID-19 pandemic is continuing to be slower than expected in Asia.
China is still enforcing its “zero-COVID” policy, while Shanghai and Hong Kong are experiencing a spike in infection rates and fatalities, which is delaying border openings and hindering employment recovery, particularly in tourism-dependent economies.
In the meantime, other nations in the region are demonstrating greater resilience. APAC had lagged behind the rest of the world in the Great Resignation, but as of March 2022, it appears to be in full swing. In fact, 58% of employees in Australia, Singapore, Japan, Hong Kong, and Malaysia intend to leave their current positions. Lack of growth opportunities, dissatisfaction with their salaries, and concerns for their well-being appear to be the primary reasons for these departures, similar to those cited by Western workers.
As of May 2022, the unemployment rate in Australia is at a record low of just under 4 per cent, and it is expected to fall even further. On the other hand, as a result of the pandemic-related closure of the country’s borders, there is currently a severe lack of available labour in the country. For the first time since 1946, overseas migration to Australia was negative. Prior to the pandemic, one in ten Australian workers was on a temporary work visa. Then, as a result of lockdowns, hundreds of thousands of workers with temporary visas were forced to leave Australia, leaving a record number of vacancies. As a result, from 2020 to 2021, the retail and manufacturing industries saw a tripling of job openings and a decrease in unemployment due to the lack of access to a larger labour pool.
Then, in December 2021, the country’s borders were reopened to students and visa-holding migrants, which assisted in the filling of positions, particularly in retail and hospitality. Currently, numerous Australian organisations are exploring new talent pools, such as tapping globally dispersed talent.
Due to Australia’s size and complexity, the knock-on effect of the pandemic on the labour force is still to be determined. Despite this, 88 per cent of Australian CEOs are optimistic about the nation’s economic expansion.
Changing Demographics Have an Impact on Talent Pools
Many countries in APAC are experiencing labour shortages due, in part, to ageing populations and the accelerated retirement rate caused by the COVID-19 pandemic. However, Gen Z comprises 25% of the APAC population, and they are eager to exert influence.
On the opposite end of the spectrum, a study conducted by the Japanese government in 2021 revealed that more than 40 per cent of workers aged 60 and older desired to continue working, with many citing a desire to remain active and contribute to society. Despite increased workforce participation and technological advancements, experts predict that Japan will face a labour shortage of 1.5 million workers by 2030.
In another part of Asia, India is experiencing a surplus of talent:
In April 2022, India’s unemployment rate was greater than 7.8 per cent, whereas the majority of nations have witnessed a decline in unemployment since the pandemic. In April, the Indian labour force grew by 8.8 million people; therefore, despite the decline in unemployment, there are still not enough available jobs to meet demand.
The Indian government implemented extensive industrial and trade policy reforms in 1991, which resulted in increased foreign investment due to the country’s youthful population. As a result, India transformed from a predominantly agricultural economy to a services-dominated economy with a surge in IT-related employment. As a direct consequence of this, there are fewer jobs that require a low level of expertise that can accommodate a large number of workers with no or limited training.
In addition, the overwhelming majority of jobs in India are informal: A little more than two per cent of Indian workers have access to benefits such as retirement savings and healthcare. Consequently, these high unemployment rates may be influenced by the number of educated young people who can afford to remain unemployed until they find desirable employment, rather than accept low-paying positions. Conversely, the poor, who have limited access to education, are compelled to accept any work they can find, which frequently entails pursuing precarious, hourly-wage labourer positions in manufacturing and construction.
Investing in technology is rising, but women are a missed opportunity.
India is home to some of the largest technology companies, including Wipro, Infosys, and HCL. This has a significant impact on talent trends in the APAC region. The expansion of the information technology industry in India has also led to the creation of more than 16 million new jobs, which are driving the digital transformation of multinational corporations. These multinational corporations offshore their information technology and research and development functions in order to take advantage of India’s more cost-effective software talent.
India’s STEM university graduates have more than doubled to meet the growing demand for tech talent. Despite the fact that IT is a leading interest among 21- to 25-year-olds, there is still a talent shortage.
Additionally, India has become a gateway to other Asian markets as a result of global corporations’ embrace of Indian talent. Currently, $1 of every $2 in global investment is allocated to Asian companies, some of which are investing in their own talent pools. Apple, for instance, has committed to constructing three Developer Academies in Indonesia, each of which will annually produce 200 iOS developers.
As a long-standing innovator, Japan’s high-tech and renewable energy industries are the most lucrative in the nation. Consequently, the Japanese education system is currently adapting to meet the demand for digital and software skills: Programming languages were integrated into the elementary school curriculum in 2020.
However, not all APAC nations emphasise technology education. In Australia, only 3,000 to 4,000 IT graduates enter the workforce annually, which is insufficient to meet the need for 156,000 new technology workers by 2025 in order to prevent economic growth from being stifled by skills shortages.
Any business that wishes to remain competitive, particularly in the manufacturing or technology industries, must prioritise becoming a top employer in APAC. And one talent pool they could target in Asia would be women. Diversity and inclusion is one area in which the vast cultural diversity of APAC is evident, but the region scored highest in terms of the significance of maintaining gender roles. Obviously, this varies from country to country, but in patriarchal societies such as Japan and China, women are frequently underrepresented in the workforce due to traditional expectations that they care for the home instead of contributing to the household income.
Alone in Japan, 84 per cent of STEM graduates are male. Unfortunately, this will have the greatest impact on the technology sector. Businesses that make investments in the reskilling and upskilling of women and that offer flexible working arrangements will reap the benefits when it comes to attracting and retaining talented female employees.
According to research conducted by McKinsey, eliminating the gender employment gap in the Asia Pacific region by 2025 could add an additional $4.5 trillion to the annual GDP of that region.
Recruitment Process Outsourcing agency in Asia-Pacific
In spite of the challenges posed by COVID-19 and shifting demographics, companies in the APAC region have exhibited resilient profit growth over the past decade. Attracted by the enormous labour workforce market, leading companies are investing in the talent pools of APAC as a way to future-proof their workforces and take advantage of the region’s abundant human resources.
However, due to the complexity of the region, there is no universal solution for recruitment in APAC. Thus, an increasing number of multinational corporations are outsourcing their international recruitment processes (RPO).
How to find a global recruitment process outsourcing (RPO) partner.
By forming a strategic alliance with a global RPO provider during the process of formulating a global recruitment plan, you will have the opportunity to tap into a vast pool of information and experience.
This is due to the fact that global RPO providers acquire this knowledge and experience by working in a diverse range of business sectors all over the world. When looking for a partner, it is essential to make certain that they have previous experience working in the regions of the world in which you intend to recruit potential employees. If they do not, you should continue your search until you find one who does.
Any global sourcing programme is going to come with its fair share of compliance and cultural challenges; your partner should help you navigate these obstacles so you can successfully complete the programme. It is essential to keep in mind that even though some local labour laws address problems that arise after the hiring process, those laws may still have repercussions for the hiring process itself. It is for this reason that it is important to keep this fact in mind.
Working with a provider of RPO services can help you get ready for many of the challenges that you may face before you post a job or make an offer. This can be helpful both before you post the job and after you make the offer. Additionally, a partner with years of experience can help you anticipate any communication and training issues, which enables you to tackle the issues head-on. This is because they have the ability to help you plan ahead. Working with a partner who has more experience is beneficial in this regard. As a result of this, you will be in a position to provide exceptional service to your customers.
If you are considering building a global recruitment strategy, you should educate yourself about the global RPO solutions that we have available and give them some consideration. Simply click here to arrange for one of our specialists in international recruitment to call you back.