Global Perspectives: A View From Singapore’s Global Business Leaders

Singapore skyline

In 2011, Singapore was ranked the best country in the world to do business by the World Bank and was also ranked first in the world in investment potential in the 2011 Business Environment Risk Intelligence report.  Singapore receives high marks from both the World Economic Forum (ranked second in global competitiveness) and INSEAD (ranked third in their global innovation index).  Working hard to be the center for commerce in Southeast Asia, Singapore’s business leaders understand that the education system must produce a workforce that can keep up with global demands to continue as a top performer economically and to continue to enjoy a rising standard of living for its citizens.

During a recent trip to Singapore, CIEB Director Betsy Brown Ruzzi along with NCEE President Marc Tucker and CIEB Advisory Board member Vivien Stewart, met with a group of business leaders from a variety of industries in Singapore.  Each are on the front lines of managing the recruitment, hiring, training and evaluation of the Singapore workforce in their particular industry.  All have had experience not just in Singapore, but in a number of other countries in Asia and around the world, building human capital systems for their companies.  They shared their thoughts about how Singapore’s education system affects hiring practices, what they have observed about how Singapore’s workforce compares to that of other countries, and how Singapore is innovating in order to remain globally competitive.

Among the companies participating in this business roundtable was a global organization that employs 127,000 people worldwide with 1,700 employees based in Singapore.  In that company, ninety-five percent of the Singaporean workforce is recruited directly out of university, with the company providing them with the training they will need to be promoted from within.  That company also told us that they maintain a global selection standard when vetting future employees.  Their employees are made up of sixty-one different nationalities in Singapore alone.  They told us that they are able to attract the best from around the world, because people are willing to move to Singapore.  Singapore, they said, “…has a good infrastructure for foreign workers and their families, with international schools and assistance with moving to and from the country”.  It helps a lot, they said, that Singapore is an English-speaking nation and provides all of the modern conveniences and amenities these employees might want.  They told us that they seek out people with intelligence, people skills and agility for their firm.

Another corporate leader we talked with from the services side of the economy employs a local workforce of 9,000 people, seventy percent of which are Singaporean.  She told us that the Singapore government prefers local hires and has imposed a quota on foreign hires.  This poses some problems for the company, because Singaporeans do not generally like shift work, and so they look to the Philippines and China for functions requiring this type of work.  She said that they are working very hard to figure out how to make service-industry work more attractive to Singapore’s job candidates.

Another business leader whose firm sources, develops and trains talent to match employer requirements in Singapore and across the world including Australia, Japan, Africa and the United States works with Fortune 500 companies who have offices in Singapore and other parts of Southeast Asia.  He told us that many research and development groups have been moving to Asia in order to produce locally driven innovations.  Asian populations are growing, and they have different needs from Western populations.  There is fierce competition for international business between China, Singapore and Hong Kong.  Although international companies do not see Singapore as a big consumer market due to its fairly small population, the talent it can offer makes it a big draw.  The competition between Hong Kong, China and Singapore is based on business leadership, legal infrastructure and the ecosystem of suppliers.  Right now, he said, Singapore is ahead in all of these respects.  Even the mining industry is considering establishing a base in Singapore, because they need access to the banking system and to the kind of talent Singapore can provide.  Singapore can be used as a hub for that industry, with buyers and sellers based there and refiners nearby.  He added, “Singapore is also attractive because of the language abilities of its population.  Many customers are from places like Indonesia.  Singaporeans are more likely to speak their languages than people in Hong Kong or Shanghai, for example.”

A representative from the finance industry, whose global firm has its South East Asian headquarters in Singapore, said that its workforce is very mobile – employees often move around the world over the course of their careers.  When recruiting employees, they target students from the Ivy League as well as top universities in the United States, the United Kingdom, Australia and Singapore.  Their priority is to keep their employees for the long term, and to that end, they have a talent reassignment program to help employees remain employed during economic downturns.  In this particular company, many of its employees are from the United States and the United Kingdom who want to work in Singapore because of the strong market, compared to the economy in their home countries.  However, at the same time, she told us that her company is trying to decrease costs and has realized that they can hire local talent for the jobs traditionally reserved for expatriates, without having to spend money on the benefits expatriates require.  Singapore, she said, also has advantageous tax policies for corporations; corporations are taxed at a rate of 17 percent, as compared to 32 percent in China.

One member of the group mentioned that consumption and growth is stabilizing in markets like Western Europe and North America, while Latin America, China, India and Vietnam all have large populations and growing consumer bases.  Those different markets require different innovations due to culture and resource availability.  In his company they want to create an environment where the business can grow with local talent, and particularly people with high skills and the ability to meet future needs.  Singapore, he said, is in a unique position, competing with Hong Kong and Shanghai as an emerging East Asian business hub, as compared to places like Seoul and Tokyo, which have reached a plateau.  The Singaporean government has thought ahead to attract international business by providing excellent infrastructure.  He sees Singapore as a well-oiled machine, particularly in the realms of finance and commodities.  He told us that it is the number one country for bright people who have the ability to think ahead, plan and orchestrate development, and it is unique in Asia.  While not perfect, Singapore is much more advanced in these respects than anywhere else.  His company is moving one of its largest manufacturing units to Singapore to base the business close to the fast-growing Asian market.

“The talent in Singapore is as good as in any other market that we work in,” said another business leader.  “While workers in Korea tend to be good with analytics, employees in Singapore are good at operating with discipline, rigor, depth and follow-through.  Recent university graduates are top-notch, and creativity has really picked up in the last ten years.  However, the younger generation is missing drive, which is really present among workers in China.  This seems to become a problem as any economy strengthens.  The biggest employment challenge in Singapore, though, is volume.  Singapore is a small country with a workforce of only about four million people and 40,000 new graduates a year.  There is also competition from foreign workers, since a lot of companies bring in employees from other countries.”  Comparing Singapore’s workers to those of other countries, he classified them as, “having strong power of mind — intellectual capacity — and strong collaborative skills, with slightly weaker agility and leadership skills.  In Japan, China and Hong Kong, power of mind is very high, and in Korea, agility is very high.  In the United States, intellectual power is ok, but agility and leadership skills are very high.”

The service industry representative talked to us about the local talent in Singapore as “…having strong project management and multi-tasking skills.  They work hard; people in Japan, China and Korea may work longer hours than Singaporeans, but can be less productive.  Their weakness is in their aversion to doing shift work, and their high expectations for what they should be doing can be an issue.  They tend to expect immediate promotions, and are less willing to take on less challenging positions or to do administrative work, but this is an issue with all high growth, developed economies.”

In our discussion about the Singapore education system’s contribution to the Singapore economy, one member of the group said, “The streaming system in Singapore’s schools can be a self-fulfilling prophecy.  The students who are considered the best and the brightest get a disproportionally high investment from educators, and generally are groomed to go into government.  Due to the high levels of early investment in their education, these students are some of the best in the world.  But we see a big drop when we begin to look at the middling and lower-level students, who are the ones who go into middle and lower management jobs.  The system would be better off investing in traits like risk-taking and creativity.”

Another company told us that they hire a small number of graduates from Singapore’s polytechnics.  These hires have good qualifications, although that company generally prefers university graduates.  He mentioned that some polytechnic students use that experience as a steppingstone to university, and after graduation are often hired for management positions.  One of the other company representatives at our meeting said that her company hires a large number of employees from polytechnics, and gives them 18 months of training after graduation.  The government, she said, has recently been working to raise the status of polytechnics by promoting them as a good route to universities and careers.

As we finished up our meeting, one business leader summed the conversation up by saying, “Singapore will continue to reinvent itself.  Over time, it hopes to become a headquarters hub for international business and for research and development centers, and it will continue on the path to becoming a leisure and entertainment destination.  It is easy to attract people to work in Singapore, and though entrepreneurialism is weak, creativity among workers is on the rise and will continue to grow.”  “Singapore is branding itself as an education hub now, too,” said another member of the group.  “Asians from other countries are choosing Singapore for their studies, and there are numerous agreements and institutions in place to facilitate this development.  In terms of creativity, the government has been making strides in this arena, and opened up the entertainment, art and culture scenes to attract creative types.”