Procurement

Singapore Procurement Market 2022

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Singapore Procurement Market 2022

Posted on February 2022 By Ben McDonald

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Overall outlook

2021 was a strong year for the Singapore Procurement job market, with more activity than we had seen for a few years. Driving this trend were several key factors, notably the lifting of hiring freezes from 2020 and pent-up demand, increased business confidence in general, and rapidly changing dynamics in the business and supply chain environment that have brought about a spike in employment opportunities.

Whilst overall open vacancy rates today are significantly up from the same time last year (~50% increase), it is important to distinguish between the senior (Director and above) and PMET (Professional, Managerial, Executive & Technical occupations) markets. Most of the activity has been within the PMET market, as outlined below.

Breakdown of hires for the Singapore Procurement market in 2021:

·        Head of Procurement appointments – 6% of hires – employer driven job market.

·      Senior level hires (Director level and above) – 20% of job moves – a balanced candidate and employer driven job market.

·      PMET hiring – 60% of job moves – a candidate driven job market.

·      Junior hires – 13% of the market.

·      There were approximately 70 graduate / entry level hires in total in Singapore.

The decline in the number of foreign talents employed in the Singapore procurement market seems to have reached a bottom. However, with most of the job growth activity being at PMET levels, the ability and willingness to offer Employment Passes is still quite scarce – or has just not been possible due to migration restrictions. Early indications in 2022 point towards a slight increase of appetite for issuing Employment Passes, which are more commonplace for the Senior Management level where the talent market is tight, or the hire becomes very senior.

There continues to be a shift in the profile of organisations, companies, and industries that are downsizing and those that are growing. It isn’t always the case that the supply of talent coming from downsizing industries fulfils the demand in new industries, as companies focus their hiring on hard skills.

There is an opportunity right now for companies that are struggling to secure procurement talent to be open to strong talent from another industry or category and train them in industry-specific skills that might be scarce in their sector.

Salary growth

·      Average 15 - 20% when moving jobs.

·      4% for annual increments in Singapore, the country in Asia with the lowest percent increase (elsewhere in high growth markets it can be up to 9%).

·      PMET salaries are 4 - 5 times higher than graduate salaries.

·      Senior hires see salary growth in line with inflation, as this continues to be an employer driven market.

·      Bonus payments being made in early 2022 are strong, with many employers paying at least 100% bonuses.

Rise of public sector procurement

In the past 1 - 2 years we have seen a significant rise in public sector and local procurement in Singapore, with organisations such as ALPS (the central supply chain agency for the Ministry of Health), DSTA (central procurement for the Ministry of Defence) and ST Engineering building scaled and centralised procurement functions hiring large numbers of procurement professionals.

Rise of goods for resale sourcing (retail / ecommerce)

As commented in an earlier article, we are starting to see a growing number of global sourcing organisations in Singapore. The reason is that Singapore represents an alternative to the more traditional finished product sourcing location of Hong Kong, and the city state is also positioning itself as a location for Southeast Asia product sourcing, whereas Hong Kong is generally preferred for China sourcing.

ESG roles being filled by procurement professionals

There is a significant increase in the number of ESG roles in the market, with more companies defining ESG as a standalone strategic function – particularly companies which have complex supply chains or are sitting within a traditionally high carbon footprint value chain.

With an increased number of roles, and limited talent that has exact experience in this area, procurement talent pools are currently being tapped for key ESG positions. Hiring companies see the value of procurement skillsets in stakeholder engagement, supplier management, risk management, and commerciality as being ideal for transfer into ESG functions.

Singapore’s procurement employer profiles

·         Industries hiring the largest number of procurement professionals in Singapore are Public Sector, Hi-Tech/STEM and FMCG.

·         Growing sectors and industries for hiring are Public Sector, Hi-Tech, eCommerce and Advanced Manufacturing.

·         Declining industries for hiring are Resources, FMCG, and Electronics Manufacturing.

·         The major procurement employers of six years ago – multinationals including Shell, ExxonMobil, Barclays, Rio Tinto, BHP, and J&J – have all been replaced in the top 10 with a mix of public, private, and local sector companies including RWS, ALPS, DSTA[1] , ST Engineering, Lazada and Grab.

·         Mainstays in the top ten (albeit with declining headcounts) include IBM, HP, Unilever, and P&G.

Predictions for 2022 and beyond

·            There will be a talent crunch for senior procurement positions but to a far greater extent in the PMET market, driven by a continued buoyant job market, visa restrictions, today’s very low intake of graduates and the significantly reduced number of junior and entry-level vacancies in the market.

·            Diversity & Inclusion agendas will continue to increase and become more frequently mandated in hiring processes, mainly for senior hires. The impact we are observing is that of extraordinary salary growth in pockets of the market due to this drive to correct imbalances[2] . D&I in the hiring process does not seem to get the same level of attention from organizations at the junior and PMET levels of the market.

·            Demand for ESG experience will increase and become a greater component of strategic procurement roles.

·            Dedicated ESG roles will become a viable career path for strategic procurement and supply chain professionals as the function defines itself in industry.

·            Increased employee leverage will become evident in discussions around the main drivers of salary, flexible working arrangements, overall job content, and career planning.

·            Growth pockets of the market in Singapore will be for ESG and Digital Transformation related roles.

·            STEM (Science, Technology, Engineering, and Mathematics) related industries will continue to drive job growth in Singapore and dominate as the largest employers in procurement.

·            Salary cost pressures and a tightening skill market will see more traditional procurement and category management roles moved elsewhere in Asia.

·            The strategic and regional procurement market will continue to grow rapidly in China, Indonesia, India, Thailand, Malaysia, and Vietnam, where salaries for strategic and regional roles are getting close to or equivalent to established market salaries.

·            Procurement roles in goods for resale sourcing organisations (retail / ecommerce) will continue to rise, with several well-known brands moving these functions to Singapore from HK in 2021, and more scheduled to arrive and hire in 2022 and beyond.

Tips for hiring companies

·         The ability to broaden recruitment searches across industries helps optimise hiring in the current market. This approach comes with a requirement for stronger training and onboarding processes, which pay off through the longer-term benefits of retention and engagement.

·         If you or your company has a D&I agenda, longer term success can be achieved by addressing these needs in your entry level, graduate, and PMET hiring. Presently we are not seeing the same D&I focus for junior to mid-levels.

·         PMET hiring, which is 60% of the market, is very tight. Active local job seekers generally have options; therefore, a thorough understanding of candidate needs, awareness of market salaries, and a speedy and mutually engaging recruitment process are highly recommended.

·         Candidates are increasingly driven by job content and exposure, as well as job rotations and hybrid working. Reviewing your offerings and job design within the context of these new market conditions is recommended.

 

Tips for candidates

·  Before engaging in a recruitment process, assess and communicate your personal needs. Company offerings vary widely, with many presently in flux. This presents an opportunity to align your professional goals with your personal needs and helps to avoid a recruitment process and job mismatch.

·  Understand the job market you are in, is this an employer or employee driven market? Adapt your approach and expectations accordingly.

·  If you are engaged in a recruitment process in an industry that is new to you, be certain to draw on parallel experiences at all communication points, starting with a tailored CV.

·  Salary growth can be healthy at present for job moves, but the non-financial components of a job offer (such as industry, and development opportunity) can pay off long-term and can safeguard your future career; for this reason, we highly recommend taking a strategic approach, particularly in Singapore.

·  In a rapidly changing and dynamic market, ensure that your next move leads towards your mid- to longer-term needs, and is consonant with market trends and future industries.

·  Ensure that personal development is high on your agenda and ideally geared towards future jobs and industries. Consider these qualities alongside salary when assessing opportunities, keeping the long term in mind.

Our regional team is actively networked in the Asia procurement market, having filled over 100 procurement roles in 2021 with multinational companies.

If you would like to discuss what these observations mean for your business or team, please feel free to contact me:

Ben McDonald

Director, Supply Chain and Procurement

Connexus Global, Singapore.

ben.mcdonald@connexus-global.com

+65 9807 3174

 

Data sources:

LinkedIn: (1/2021 - 1/2022).

Connexus data and trading history (1/2021 – 1/2022).