Singapores competitive financial services
“Today’s workforce has become more global, virtual and diverse than it has ever been, this makes acquiring the right talent an increasingly complex and challenging activity. Winning the war for talent requires more than just winning the recruiting battle” (Harriot et al. 2008). It involves a complicated and difficult undertaking – developing internal systems that attract and retain the right talent and organise the talent in ways that lead to continuous innovation and change. While the business landscape has changed dramatically, recruiting and retaining the right people is just as important as before.
But the stakes are higher now that the margin between success and failure is razor thin, claims Lynch (2008). Johnson (2002) states that in today’s climate, human resources (HR) is expected to deliver business results on a much tighter budget, and according to Larkan (2007) this causes lower headcounts which means that each new hire is that much more crucial to the firm’s success, and the departure of a star performer can impact financial results that investors are watching more closely than ever.
In this environment, HR leaders need to develop business processes that allow their teams to be more efficient and productive. At the same time, they will need to build strong business cases for any proposals to spend money on initiatives related to recruiting, training and retention efforts. According to the Manpower 21 (1999), which is a strategic blueprint to develop Singapore’s people and manpower, its vision for Singapore, is to become a ‘Talent Capital’.
Concurrently, Singapore’s Senior Minister Mentor Lee Kuan Yew wrote, “What was the most important single factor for Singapore’s rapid development since 1959? Without hesitation, my answer is the quality of the people. For not only are our people hardworking, quick to learn and practical, Singapore also had an extra thick layer of high calibre and trained talent” (Lee 1989). In the next few decades, people, with their capacity to acquire, apply and create and capitalise knowledge will be key to Singapore.
A society that values talents and encourages talent development will have an edge over others. In order for Singapore to remain competitive, she needs the fullest development and participation of her indigenous talents. In addition, the supplementing and leavening effect that foreigners provide with their skills and new ideas is needed. While Singapore has a good stock of talent, her pool is not sufficient in enabling to grow the economy and to compete globally. Thus Singapore needs to augment its own talent pool.
Furthermore, international talents infuse our society with new knowledge and capabilities; and they help enlarge the economic pie by allowing more economic activities. The attraction of international talents is thus not only a measure to supplement skills shortage, it is in fact a strategic move to maximise economic growth. While traditionally, Singapore competes for capital to drive the economy, the new era of knowledge economy will require the country to compete for talents to maintain and create jobs.
On 14 August 2008, McMillan (2008) reported that “Singapore’s government and big businesses blame a limited talent pool for their dependence on a political elite and a growing number of foreign chief executives. ” Singapore’s shortage of talents has been ascribed to a number of factors, such as the surge in retirement amongst the baby boomers with insufficient replacements coming on stream from succeeding generations, as well as brain drain from the more developed countries. Insufficient homespun expertise has proved recruiting to be a daunting task.
Very often, companies have to resort to importing talents to fill key positions. Being pitched against other countries with more to offer, Singapore’s effort to attract talents to Singapore or retain local talents is an uphill one. Singapore needs to enhance its talent attraction measures to actively seek out and draw talents. Issues faced in Singapore’s financial industry The process of identifying and hiring the right talent is particularly difficult in Singapore’s competitive financial services sector.
This is compounded by the country’s small population which limits the talent pool. Attracting and retaining top talent is a priority across all industries, but financial services organisations, in particular, are feeling the pinch. Competition from non-bank entities shows no sign of slowing. Indeed, in this tighter financial services environment, companies need to be able to grow by changing, rather than adding, positions. It’s clear that managers must invest wisely in training, and financial professionals need to leverage learning opportunities.
The lack of talented staff is still the biggest challenge for banks seeking to expand their wealth management business in Asia, said the head of private banking at HSBC (Lynch 2008). As stiff competition for experienced wealth managers drives up pay and rich clients become more discerning, HSBC is turning more towards grooming its own private bankers from within, said Mr Chris Meares, chief executive officer of HSBC Private Bank (Lynch 2008). Financial institutions can do their part to provide such continual training opportunities for their employees.
In Singapore, international banks such as ABN Amro and UBS have set up regional training centres here to serve the training needs for their Asia Pacific companies. Last year, the Monetary Authority of Singapore (MAS) conducted a survey among the almost 700 licensed financial institutions in Singapore on their manpower needs (Figure 2). The bulk of financial sector professionals continue to be employed in traditional areas such as commercial banking, general insurance, corporate finance, general treasury and trading activities (Monetary Authority of Singapore 2008). The manpower needs of the financial industry cannot be met overnight.
One way to bridge the skills gap and to increase the manpower resources available in Singapore is to recruit more international talents into her shores. “Currently, international talent form approximately 15 per cent of the total executives in Singapore’s financial sector” (Monetary Authority of Singapore 2008). As more foreign players increase their presence in Singapore, she can expect a greater proliferation of such financial talent into her shores. This will lead to greater cross-fertilization of ideas and increased innovation amongst industry players. This will provide the cutting edge for the nation’s competitiveness.