S’pore’s IT sector keeps hiring as new employment outpaces retrenchment by 26 times

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Parliamentary discussions in Singapore are often a source of valuable information, as questions asked tend to be responded with actual figures, providing an objective view of the situation.

In one of the latest responses to a question asked by Ms He Ting Ru, Workers’ Party MP about the employment situation in the Information & Communications sector in Singapore and how digitalisation of business may influence employment opportunities for local residents, the Ministry of Manpower (MOM) shed a light on the recent trends.

There are 128,900 local residents employed in the sector as of March 2022, but what I think is more noteworthy is the pace of new employment.

Between the fourth quarter of 2021 and the first quarter of 2022, there were 260 retrenchments in the industry as opposed to 6,800 new jobs — or 26 times the number of people that are let go. Moreover, the number of vacancies has also increased, from 8,400 in September 2021 to 10,800 six months later.

That’s over 10,000 jobs in a sector that’s currently employing about 130,000 people, and barely retrenching anyone.

Even if we consider hundreds who are hurt in high-profile layoffs in Shopee, Crypto.com or Coinbase (among many others), they still pale in comparison with the thousands finding new jobs in IT elsewhere.

It should not be all that surprising, considering that while consumer businesses tend to grab the news headlines, IT employment is not confined to the Silicon Valley wannabes.

The oil and gas industry, for example, despite global vilification, is still going strong and keeps adding more IT staff in Singapore — chiefly developers and network administrators — according to GlobalData’s Job Analytics database.

Overall re-employment is the highest since 2015

The situation is good not only in ICT, but the overall market too, as 71.5 per cent of those who lost their jobs managed to find new employment within six months — the highest figure in seven years, according to official MOM data.

Tesla has also bounced back. After making headlines for axing its country head in Singapore just a year after employing him, Tesla is back with several employment offers for specialists in several fields.

The company technically doesn’t qualify as an IT/ICT business (despite all of the innovation it churns out), but what it does show is rationalisation of expenses and prioritisation of employment of specialists over managers.

While I’m not privy to the details, it’s quite certain that the pay package of a country head in a trillion-dollar company had to be substantial — quite likely so much so that they can now employ several people at a cost of one leader (in a market that is still relatively small for the company).

One person’s loss is a gain for seven new hires that Tesla is looking for its offices in Toa Payoh.

Remote work is not for everyone

Meanwhile, as the country ditched almost all pandemic restrictions, the number of vacancies offering remote work in Singapore has dropped by 25 per cent, according to hiring giant Indeed.

This may be an issue to many, particularly young workers in technology companies or tech-related roles, for whom flexibility in the workplace is such a dealbreaker that they make consider switching jobs should their employer not provide the option.

All in all, however, given that the labour market remains favourable to employees in Singapore, it seems that they stand to come out on top as companies hungry for talent adapt their working conditions to land the best people before someone else poaches them.

But the really important takeaway is that digitalisation does not cannibalise jobs, creating more of them instead.

This brings me back to the original questions asked of MOM in the parliament. One of them exhibited a common worry that consolidation and rationalisation of expenses in the IT sector will make some people redundant, ultimately leading to a decrease in employment.

The reality is that there are still an enormous gap in IT talent deployed by companies, including those which never make it to the news headlines.

The current crisis and post-pandemic readjustments forced businesses to invest more in IT solutions, which can make them more resilient in the long-term. This is particularly visible in a country lacking abundance of cheap workforce, like Singapore. Companies can’t just throw more people at a problem — they need solutions that will make them more productive.

It’s just another lesson of the pandemic: overreliance on people creates strategic problems when they can’t go to the office.

At the same time, however, it means that people can do more — even out of office — when they have access to the right tools. And someone has to deploy and maintain them, hence the growing need for IT staff across the entire economy.

After all, the age of completely independent AI is nowhere near and all this technology has to be operated by someone, and that someone will get the job.

Featured Image Credit: Singapore Institute of Technology