This week we had the opportunity to sit down with Neal Walters, to discuss his insights on current economic trends.
Q: How are economic trends affecting the current talent market, and how do you see these evolving over the next 12 months?
A: There are definite reductions in the number of open senior roles now, when compared to 1-3 years ago. Many companies are looking to see how severe this economic downturn may become, before they reopen headcount to support growth or to even backfill.
In Asia, however, some US companies see hiring costs much lower than in past quarters. This is attributed to the recent increase in the strength of the US dollar, which has reduced the impact of some hiring costs on the balance sheet.
We feel as Asia, with China, fully opens up from the Covid restrictions, it will bring an added spark to economies like Thailand, Vietnam, Japan and Singapore, but ‘will it be enough’ is the question? This may be supported by a boom in tourism, which has been hammered over the past three years. The streets in Singapore and Japan are now again bustling with tourism, which is nice to have back. With the Yen so weak now Japan will look to challenge past records on tourism in 2023 I’m sure.
Q: How can businesses prepare themselves for economic change?
A: Japan can prepare for a return of inbound sales to their tourism and retail industries as consumers flock to take advantage of a weaker Yen. We have been fortunate to work with many retail and fashion brands who have been preparing for overseas shoppers to return in droves, which can only be a positive sign for the region.
However, Singapore is grappling with a different change of landscape as hyperinflation on rent and cost of goods has spiked to a point which has made the tax haven status of living there a moot point. This will, however, create a big churn in the workforce, and this talent rotation will offer opportunities to many looking to move up in their career. Companies in Singapore need to deal with turnover that the cost of living has created. We may see more Jobs in APAC be based out of Malaysia or Bangkok in the future as a trend.
We feel that Asia in general will see some strength in economic return before the US or Europe as the western world is very stock price sensitive on how they manage their businesses and tighten harder on costs when times are tough. Japanese companies are arguably unphased by slowdowns in the economy and slowly push forward no matter the market conditions.
Q: Which industries do you think will increase their executive search during 2023?
A: It is too early to say for sure that any industry will see huge upswings in hiring. However, the potential of AI advancements will drive growth in the Semicon and software industries. As many professionals continue to WFH and online commerce volume increases with the now normalised buying habits of the everyday consumer, you can bet that cyber and tech security / software companies will continue to thrive.
Q: The APAC economy is predicted to slow in the coming year as global demand for goods moderates and the China economy struggles to gain traction. How do you think this will affect the APAC talent market?
Geopolitical tensions have not been this high for many years. As the US continues to provoke China amidst their push for more global dominance, things will likely escalate negatively. This will be felt by the consumer as higher prices will remain due to supply chain complications and manufacturing inefficiencies. These trends are already visible, but China will always remain a tough country to fully understand and maybe harder to have consistent business practices that are fair for foreign companies. We are already seeing many companies give up on manufacturing there, where Vietnam, Malaysia and India will benefit from this shift.
Q: How important is maintaining strong foundations and good client relationships to help recruitment businesses weather any storm?
In our experience, having seen two impactful downturns in the executive search industry over the past 18 years, it is important to be mindful of our strengths. Staying in our lane as experts will keep our business and brand in a strong position. We can experiment with new revenue streams when the economic conditions are more stable. But for now, improving our processes by harnessing technology, to help save time when filling tough searches will help improve productivity. In addition, we will continue to build relationships with our clients, giving us longevity through trust and reliability.