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Insights into the Challenges Faced by Recruiters in South-East Asia  

Recruitment professionals in South-East Asia (SEA) have witnessed a transformation as talent acquisition (TA) has evolved into a more strategic function.

According to LinkedIn’s Future of Recruiting Report, SEA version, between 2022 and 2023, 90% of recruiting professionals reported this positive shift. However, they are also facing new challenges in the dynamic economic landscape and are adapting to embrace technology to improve their processes.  

In this blog, we will explore the changing role of recruiting in SEA, the impact of Generative AI (GAI) on the industry, and the crucial factors shaping the future of recruitment in the region.

Along with that we will explore some of the key challenges recruiters face in South-East Asia and the solutions that can help address them. 
 

Recruiting’s Strategic Importance in SEA is Growing 

Recruiting professionals in SEA recognise the increasing importance of the feedback loop among recruiting, finance, and Diversity, Equity, and Inclusion (DEI), particularly with the rising transparency in pay discussions.

Companies must be agile in managing their compensation strategies as pay transparency rises. Recruiting leaders who initiate conversations about compensation can help their organisations stay ahead of the curve.  

Unfortunately, only 12% of recruiting professionals in SEA reported that their companies increased salaries enough to keep pace with inflation, indicating the need for more proactive measures, LinkedIn reports. 
 

A More Favourable Future for Candidates and Employees 

Recruiting professionals in the region are optimistic about the future, with 78% predicting that the recruiting landscape will become more favourable to candidates and employees over the next five years.

This shift implies a greater focus on candidate experience and employee satisfaction. Companies must prioritise their workforce’s well-being and growth opportunities as they compete for the best talent. 
 

Generative AI Integration in Recruitment 

Generative AI (GAI) is an exciting development in the recruitment process that is gaining traction in SEA. Two-thirds of hirers expressed hope and optimism about the impact of GAI on recruiting.

The integration of GAI is expected to bring several benefits, including the automation of repetitive tasks, enabling recruiters to prioritise more strategic work. This enhancement will save time and resources, allowing recruiters to focus on building relationships and engaging with candidates more personally. 

Furthermore, GAI is anticipated to expedite the sourcing and engagement of candidates, with 67% and 59% of hiring professionals hoping to see these outcomes, respectively.

By leveraging AI-powered tools, recruiters can access a larger talent pool and identify the most suitable candidates faster, improving the overall efficiency of the recruitment process. 
 

Navigating Challenges in the Economic Landscape 

Despite the optimism surrounding GAI and its potential benefits, challenges persist in the macroeconomic environment.

A significant 44% of recruiting professionals in SEA reported that the current economic climate negatively impacts hiring. This downturn may require recruiters to adopt innovative strategies to attract and retain top talent amidst uncertainties. 
 

Commitment to Diversity, Equity, and Inclusion (DEI) 

While economic challenges may pose hurdles, they are not affecting the priority of DEI hiring. An encouraging 73% of recruiters claim that the importance of DEI hiring has remained the same.

This commitment to diversity underscores the region’s recognition of the value of an inclusive workforce and its positive impact on organisational success. 
 

Factors Shaping the Future of Recruitment in SEA 

Internal recruiting is poised to be a significant factor in shaping the future of talent acquisition, as reported by 96% of SEA recruiting professionals.

Companies are realising the value of nurturing existing talent and promoting internal mobility, leading to a more engaged and loyal workforce. 

In addition, 87% of recruiters believe that upskilling and reskilling employees will play a vital role in shaping the future of recruitment over the next five years. As industries evolve rapidly, investing in employee development will be crucial in meeting changing skill demands and fostering a sustainable workforce. 
 

In summary, the recruitment landscape in South-East Asia is experiencing a significant transformation, with talent acquisition becoming a more strategic function. Despite economic challenges, the industry remains optimistic about the future, embracing technology and seeking to provide better experiences for candidates and employees.

The integration of Generative AI holds promises in streamlining processes and enhancing efficiency. Additionally, the unwavering commitment to diversity and upskilling employees will play pivotal roles in shaping the future of recruitment in the region.

As SEA recruiters embrace change and technological advancements, they position themselves to attract top talent and drive business success in the dynamic and competitive marketplace. However, this path is not void of challenges that the recruiters will face to aid their respective organisations. 

Recruiting Top Talent in South-East Asia: Overcoming Challenges 

Recruiting the best talent in South-East Asia presents numerous challenges for companies looking to succeed in the competitive job market. These challenges stem from the region’s unique economic and cultural dynamics and the impact of technological advancements.  

Skills Shortages: The Impact of Changing Demographics and Technology  

One of the primary challenges recruiters faces in South-East Asia is the persistent skills shortage across various industries.

The region’s post-pandemic work patterns, technological advancements, and the outward migration of skilled workers have contributed to a need for more qualified candidates.

For instance, a Construction Industry Council study found that Hong Kong is facing a shortage of 10,000 to 15,000 skilled local construction workers through 2022, while Singapore is grappling with a shortage of 50,000 workers in the local construction industry. 

Solution: Upskilling and Talent Development 

Companies can focus on upskilling their existing workforce and investing in employee development programmes to address this challenge. Collaborating with educational institutions to design curricula that align with industry needs is another viable approach. By nurturing local talent, businesses can bridge the skills gap and reduce reliance on external sources. 

High Competition for Talent: Thriving Startup Ecosystems 

South-East Asia’s startup scene has witnessed tremendous growth in recent years, creating a high demand for skilled talent.

Countries like Singapore, Indonesia, and Vietnam have emerged as key startup hubs. For instance, Singapore boasts over 4,000 startups, with over USD 4.13 billion in equity funding. Indonesia has secured the fifth spot globally with 2,341 startups, while Vietnam’s ecosystem has over 3,800 startups attracting substantial investments. 

Solution: Prioritise Longevity and Fair Compensation 

Companies must focus on retaining talent and efficient decision-making to succeed in this competitive environment. Prioritising candidate feedback and hiring the right talent for the right roles are critical factors for success. Offering fair and transparent salary policies that cater to employees’ needs is also essential to attract and retain top talent. 

Diversity and Inclusion: Overcoming Cultural Barriers 

Managing a diverse workforce with different cultures, languages, and workplace norms is a long-standing challenge for HR professionals in South-East Asia.

Improving gender diversity, especially in male-dominated industries like construction, remains an important goal. McKinsey estimated that women account for only 12% of the global construction industry and similar figures in other regions, indicating the need for greater efforts to engage this demographic. 

Solution: Embrace Inclusivity and Equal Opportunities 

To maximise the potential of diversity, HR professionals must ensure that cultural and language barriers are well-researched and bridged. Implementing diversity and inclusion programmes that promote equal treatment for all employees will foster a healthy work environment and improve innovation and productivity. 

Restrictive Labour Policies: Promoting Labour Market Mobility 

The lack of labour market mobility within the region hampers South-East Asia’s progress in becoming a global tech hub.

Restrictive labour policies in some countries and a lack of political initiatives for increased labour mobility create challenges for businesses seeking top talent. There is a concern that workers will migrate to richer countries, leading to increased competition and instability. 

Solution: Establish Regional Standards and Common Guidelines 

South-East Asian countries must establish regional standards regulating various industries to overcome labour mobility challenges. By instituting common guidelines across ASEAN, regional businesses and industries could thrive, develop a more skilled workforce, and achieve interconnectivity. 

Conclusion 

Recruiting top talent in South-East Asia requires a strategic approach to address the region’s unique challenges.

Companies can attract and retain top talent in this competitive job market by focusing on upskilling, fair compensation, diversity, and promoting labour market mobility.

Embracing inclusivity and equal opportunities will foster a vibrant and diverse workforce, driving long-term growth and success for regional businesses. 

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