The Asian market is on the move. The majority of operators across the region are once again looking to expand headcount while three-quarters of staff say they are on the lookout for new opportunities. And salary increases are back in fashion.
Services providers understand they have to boost salaries up to 10% to retain staff and need to offer 10-20% increases to attract top talent, according to an online survey jointly conducted in July and August by Telecom Asia and RP International.
More than 60% of the HR managers surveyed say they were likely to add staff over the next six to 12 months. Nine percent are uncertain if they will expand while 30% have no plans to add staff (see chart 1).
Of those hiring, 43% plan to expand by up to 5%, almost 30% expect to grow 5-10%, and another 28% will increase headcount by more than 10%.
These figures are supported by Hudson's Q3 report, which found 65% of companies in China, Hong Kong and Singapore plan to increase hiring in the next quarter. That compares with just 22% a year ago. It is the fourth consecutive quarter of rising hiring expectations.
With developed markets bouncing back and sentiment in the region upbeat, RP International's MD for Asia Pacific Chris Baker says there is an inevitable spike in recruitment activity to compensate for the lack of hiring activity over the last couple of years.
The strong rebound is being exacerbated by the influx of investment from international firms focused on Asia as the key growth market for the foreseeable future. Baker noted that these companies often bring higher salaries and new opportunities that also contribute to movement within the market.
The annual jobs/skills study separately polled both telco HR managers and telecom employees in Asia Pacific. The HR survey targeted only operators (82% were cellcos). Of the broader employee survey, 55% of respondents worked for operators, 18% vendors, 11% SIs and 4% consultancies.
The telco jobs market is indeed buoyant, with 76% of employees surveyed saying they are actively looking for a new position. And with the talent war heating up, candidates have high expectations.
After two years of no, or very low, growth in salaries, Vicky Chai, BT Global Services head of resourcing, is not surprised the number is so high.
Baker agrees. "We're seeing candidates who have chosen to stay with their existing employer to ride out the recession starting to look for new opportunities. This will drive employee turnover and hiring activity."
Mismatch
Almost 80% are looking for a salary rise of more than 20% to be attracted to a new role (a confident 42% are looking for a 30% jump). Just 2% said they'd move for less than 10%, and only 18% would be enticed by a 10-20% boost (see chart 2).
HR managers, on the other hand, don't seem to be prepared to match those expectations. Just 21% said they'd offer more than 20% raises to bring in new talent (6% would be willing to go as high as 30%). Three percent think matching current salary would be enough while 15% would pay less than 10% more and 60% would pay 10-20% (see chart 3).
Baker's experience matches that. He said as Asian markets have rebounded employers are once again willing to offer 10-20% increases to attract the right candidate.
He noted that candidates typically have high expectations when they start looking for a new opportunity. "Candidates need to consider the full scope of the package, including non-monetary factors such as salary reviews, promotional prospects, scope of role and employer brand.
"If properly managed, the gap in expectations of candidates and employers can be narrowed and both parties can achieve a win-win."
He said in some cases where the scope of the role or the employer brand are especially attractive, some companies will be able to offer less. "But there is clear recognition that the market is heating up, the hiring freezes of the recession have lifted and the market is transitioning back toward a candidate driven one."
For existing employees, more than half of those surveyed are looking for up to a 10% increase while 26% expect a 10-20% raise (see chart 4).
Singapore-based Chai of BT Global said the market has been depressed for so long that many staff want to make up for the lost earnings is just one go.
"But companies are not keen to match those demands across the board for all roles - that's the feedback I'm getting from external firms. Common sense is still prevailing. But who knows, salary increases may once again become more common." BT has just set increases for the year at 5-10%, she said.
Talent war
The battle for talent is indeed in full swing. "Good talent is always hard to find in any market you're in. The robust market is a challenge for us," Chai said.
"We are aware many are looking for jobs and we expect to lose more people than over the past two years."
Baker said it's important for companies to accept that the market is picking up and that employees, who understood the need for recessionary measures over the last two years, will most likely be aware that salaries are starting to go up and there are increasing numbers of roles available.
"Salary reviews play an important part in retaining staff and it is important not to realize too late they need to switch out of recession mode," he said.
While demand is strongest for sales and marketing roles as well as technical positions, the changing telco landscape now requires a new set of niche skills. These include roles in rich media services, content delivery networks, cloud services and mobile app development.
A recruiter with operations in Europe and Asia told Telecom Asia that many telcos are "now trying to hire people that don't currently exist, such as rich media consultants." He is seeing a decline in demand for skills related to legacy services.
He had a surprisingly busy July and August, seeing increased activity from mid-size firms.
In the mobile apps space, Hong Kong-based Catalist Group strategic director Peter Yu said junior developers with in-demand skills, such as iPhone, C and C++ know-how, can demand more than a 50% premium over those will less sought-after skills such as Java.
Half of HR managers say demand for sales and marketing skills will increase over the next six to 12 months. Another 36% see demand rising for technical skills, with just 9% expecting IT positions to be in stronger demand.
The move to more sophisticated services and a focus on maximizing revenues and reducing churn have put pressure on the sales and marketing function, Baker said, which makes bringing in new skills and fresh approaches from other markets and industries paramount.
The positions that are most difficult to fill closely match those those are most in demand. But HR heads say technical skills are slightly harder to find than sales and marketing roles that are more in demand (see chart 5 and 6).
HR heads say the most difficult technical positions to fill cover IP-based skills, RF and transmission planning, and performance optimization and project management.
Chai said BT has strong demand for lead-generation roles, both sales and presales, as well as solutions architects.
Curbing turnover
While 36% of HR managers turn to recruiting companies, 30% say they are addressing skill shortages with training.
"We see strong demand for new technical staff," said SmarTone-Vodafone GM for human resources Rita Hui. As the Hong Kong operator continues to upgrade to new technology and develop new services, she said the required know-how is not always available in the market like in the past.
"We are focusing on internal training and development of our own staff, not only for technical expertise but also so they understand the company's mission and vision. We believe it is always most effective to develop from within."
Chai said BT's investment plans in the region, which involves adding 300 people or a 15-20% increase in headcount over the next 12 months, is helping to attract people and to keep top talent. "Many are excited about our growth plans and that can make a difference."
One of its main recruiting channels is executives' networks of contacts.
To retain and attract staff, BT is expanding opportunities internally, investing in people by offering more structured learning programs for new hires, making existing training plans more visible to staff and offering more internal and external certification plans.
"We're leveraging what is already in place to make it more accessible. This is across BT Global Services, not just Asia Pacific."
Other elements besides remuneration, Baker agreed, can contribute significantly. "Companies should make themselves attractive to their employees by providing them with opportunities to develop within the company through training and clear promotion pathways."
Beyond salary
Looking at the strongest factors beyond remuneration impacting an employee's willingness to be attracted to a new position, promotion prospects and flexible work hours ranked first and second.
Almost half of the employee respondents ranked promotion opportunities as the No. 1 factor. Less than a quarter thought flexible work hours were a significant factor.
The HR respondents also ranked promotion prospects top in affecting a company's ability to attract candidates, but flexible hours didn't even rank (perhaps because flexi-time has become so prevalent in high-tech firms).
The HR respondents say the leading cause of attrition is the competition (60%), followed by moves outside the telecom industry (30%). Another 6% go to consultancies and SIs.
Geographical variations
There is still a huge disparity in the salaries paid across the Asia-Pacific region. Salaries at the executive level are starting to achieve parity across emerging and established markets, but middle management and below roles still face a wide range in salary levels positions with comparable skill sets. While this gap is narrowing, it can still be beneficial for organizations in established markets looking to recruit talent from emerging markets.
Increased interest from European and North American candidates seeking to move to Asia is no longer shaped by the possibility of vast expatriate packages. Instead people are attracted by local salaries in established Asian markets, which are approaching those of their European counterparts.
In addition, lower tax rates and the promotion opportunities offered by the growing Asian economy versus the slow growth in the West makes it an ideal time to target overseas skills and expertise.
-Chris Baker, RP International
No security in security
Back in the late 1990s and early 2000s IT security skills were rare, so professionals in that space were paid a healthy premium. But 15 years later those skills aren't so unique, and the premium security professionals once could demand no longer exists.
But infosec pros still believe they are entitled to higher pay, according to a survey by SearchSecurity.com. More than 80% of the IT security staff surveyed thought they should be paid more than their IT colleagues in other disciplines. Nearly 60% of respondents said they were underpaid.
Security Asia said the market reality is firms no longer have to pay a premium, "so a large number of our brethren are suffering under unrealistic compensation expectations."