Layoffs not the Key to Resolve Talent Crunch in SouthEast Asia

Although the world is on the brink of a talent crisis, business leaders are seemingly unaware of the challenges ahead. Across the region's economies, we demonstrate the many places where people work, from micro and small firms to large corporations, and how they work, from self-employment to wage dependence. Our description of demography and the supply of and demand for labour and human capital, including critical characteristics and dynamic trends, also shows how East Asia countries differ from other regions and how East Asia Pacific economies vary substantially from one another. They are, instead, focusing on technology at the expense of their people.

In reality, the lack of skilled workers needed to drive business strategy could be the defining issue of the age, threatening the GDP of nations as well as the profitability of organizations. Technology layoffs have hit most areas of the world, and Southeast Asia is no exception with companies like Sea, Crypto.com, and JD.ID among those affected. In particular, fintech startups BNPLs, credit, loans, and inventory holding businesses are particularly vulnerable, like me and other places worldwide. A skills mismatch drives the global talent crunch. There are workers available, but not enough of them have the skills that organizations need now and tomorrow.

Business leaders globally are confident their companies can meet their talent needs to fulfil ambitious organizational growth plans: 86% of leaders expect to increase their revenue by 2020, and 64% expect to increase their staff by more than 20% by 2025. How realistic are those targets? With so many companies seeking to boost their headcount in the decades ahead, talent shortages will only grow more acute unless the supply of skilled workers increases. Still, 95% of leaders express confidence that their organization can meet its future talent needs. They aren’t oblivious to deficits of professional talent. Still, they may think it will be others’ problem, not theirs: 60% of CEOs who plan to increase their headcount by more than half also recognize talent deficits.

“Business as usual” is not an option

East Asia faces a future of moderate economic growth rates and pressure to respond to rising threats to well-being from work. Not taking action will increasingly threaten social cohesion, constrain productivity, and limit gains in living standards. Even as leaders bet on tech, they also recognize that its ability to drive business will rely on human skills, with 79% saying that technology’s growth will make companies value human skills more. High-growth company leaders are staggeringly clear about the shift: 91% say they will need more highly skilled workers as a percentage of their workforce. In some countries, high-growth leaders are unequivocal: 100% state that they will need to employ a higher rate of skilled workers in the future. Companies will need to adopt a more agile approach to talent: Thinking laterally about how to develop people will help to fill vital, highly skilled positions.

There is a strength of the need to improve the skills of existing talent, with 85% of leaders saying they would put in place mass retraining and redeployment of their existing workforce if there were a talent shortage; more than half of leaders deemed this as a high priority. The challenge that the future of work brings isn’t the obsolescence of human skills but the rise of the augmented workforce. We believe that new technologies are accelerating human performance rather than making it defunct. For example, some jobs are becoming automated, but many more through technology. If we hope to make the most of those advancements, we need people who can work at that interface, and right now, those people are in short supply. Identifying and retaining employees who can adapt quickly and effectively to new demands is a core competency for any organization seeking to survive in the current era of continuous disruption.

Work and economic mobility

Analytics and cognitive computing are some tools that can help enterprises identify and source agile learners who are likely to form a growing portion of the technology-augmented workforce. Technology is bringing drastic changes, and the resulting challenges of this emerging “hybrid” workforce seem increasingly more daunting. However, these same cognitive and automated technologies enable consumer-grade experiences for employees, enhancing enterprise-wide productivity and ultimately driving improved competitive value. As more and more firms establish operations in emerging markets, they should avoid taking a short-term view of cost and benefits and not be misled by the size of the working-age population.

They must understand the available skill sets and the changing demographic profile in these countries and formulate strategies to effectively engage talented people who can become strategic assets for their companies. Developing a fl flexible business model that can withstand dramatic changes in talent supply and rapid compensation costs will be a litmus test of talent management capabilities in emerging markets. Those companies that can overcome the challenge of managing this diverse workforce through well-crafted human resource strategies will have created a unique competitive advantage for themselves.

“For companies that are in a good position and can afford it, this is really a great time to strengthen the bench, shape the management bench and the leadership bench with the best talent. top management because right now there’s a little bit of competition for talent.” Layoffs also give startups a chance to build their core team. Many businesses may be vulnerable to reduced profitability and growth due to the inaction on the looming talent crunch. Leaders know that inadequacies in their workforce are a liability and that others under appreciate this threat, with 59% agreeing that companies underestimate talent as an organizational risk.