According to an extensive Korn Ferry spot survey participated in by 110 organisations across 19 sectors in Singapore, external uncertainties have slightly dampened business optimism in the market.
While 37 percent of companies surveyed expect moderate growth between 5 -15 percent (versus 26 percent in 2018), the survey revealed a two-fold decrease in companies that are predicting growth of more than 15 percent (from 10 percent in 2018 to 5 percent in 2019), and an increase in the number of companies expecting possible decline in revenues between 0 – 5 percent (from 5 percent in 2018 to 10 percent in 2019).
The global economic slowdown (66 percent), strong global competition and talent shortage (54 percent) were identified as the top external factors to have the biggest impact on overall business performance in the coming year. Out of the sectors surveyed, the global economic slowdown appears to have had a greater impact on companies in the Oil & Gas, Transportation and Construction & Materials sectors. Notably, there was also a significant increase in companies that were concerned about the impact of technology disruption compared to the last year, from 25 percent in 2018 to 38 percent this year, as well as the ongoing US-China trade war (23 percent).
To deal with the volatile and competitive business landscape, companies in Singapore are focusing on external growth strategies such as planning for expansion (33 percent) and increasing competitiveness by capturing market share (21 percent). At the same time, they are also implementing multiple actions to support cost management, including plans over the next two years to redesign work processes (67 percent) and reducing business-related travel expenses (55 percent), which are the most popular initiatives that companies have found to be effective in terms of managing cost over the last two years.
In the area of talent management, companies are focusing on making their compensation and benefits package competitive (80 percent), linking performance management and rewards (62 percent) and analysing internal equity (51 percent). This is especially crucial as dissatisfaction with their compensation package is cited as one of the top reasons for turnover amongst employees (37 percent), as well as a lack of career progression (52 percent) and working relations with supervisors (30 percent).
“Looking ahead, businesses should continue to brace themselves from the impact of the ongoing global economic slowdown and renewed trade tensions between the US and China,” said Mirka Kowalczuk, Head of Pay & Engagement Delivery Asia-Pacific, Korn Ferry, said, “, They will also need to look out for the growing talent shortage and rising performance expectations in today’s fast-changing business environment. Companies should focus not only on attracting new employees, but also on retaining their existing talent pool. Some initiatives that they could explore include monitoring and designing employee experience across the whole employee life cycle in the organisation through ongoing listening of employees’ voices, as well as balancing the financial and non-financial aspects of reward packages they offer to attract and retain employees.”
Other findings in the survey include: