Tech sector believes recent layoffs could stem ‘frothy’ asking salaries, ‘might not be a bad factor’: Tan See Leng & More Trending News

SINGAPORE — Asking salaries within the tech sector will possible decline within the wake of a spate of retrenchments, and this can result in a extra sustainable progress of the sector, Manpower Minister Tan See Leng mentioned, including that that is primarily based on suggestions he has obtained from trade gamers.

Speaking at a press convention on the superior launch of the annual Labour Force in Singapore report by the Ministry of Manpower (MOM) on Thursday (Dec 1), Dr Tan was referring to the 1,270 retrenchment notices from tech corporations that was submitted to MOM from July to mid-November this 12 months.

Dr Tan earlier revealed this quantity in Parliament on Nov 28, in a reply to a number of parliamentary questions on the mass tech layoffs, during which he additionally mentioned that about eight in 10 of the affected employees have been from non-tech roles.

“I’ve spoken to some (tech) industry players and insiders. They feel that the recent round of internationally announced layoffs involving many tech companies is actually going to remove some of the ‘froth’ in terms of the high asking salaries of people in that sector itself,” he mentioned.

“And many of the insiders within that (tech) industry have gotten back to me (saying) that (the mass layoffs) may not necessarily be a bad thing because the tech insiders think that the growth (of the tech companies) will be more sustainable moving forward.”

Economists who spoke to TODAY mentioned that since a lot of the recent retrenchments affected individuals in non-tech roles, they count on that it is just the asking salaries (anticipated wage) for such roles that can decline, whereas employees with tech expertise will possible proceed to demand excessive salaries.

RISING SALARIES FOR WORKERS IN TECH INDUSTRY SINCE 2001 

Statistics from MOM confirmed that the median gross month-to-month earnings of full-time workers, together with employer’s Central Provident Fund (CPF) contributions, within the info and communication (I&C) sector has elevated by 75 per cent from S$3,480 in 2001 to S$6,092 in 2021.

For comparability, the median gross month-to-month earnings of full-time workers, together with CPF contributions, for the actual property sector elevated by 36.5 per cent from S$3,000 in 2001 to S$4,095 in 2021, whereas the skilled providers sector noticed about a 67 per cent improve from S$3,500 in 2001 to S$5,850 in 2021.

Most tech corporations are categorised below the I&C trade however not all. Meta, which is the mother or father firm of Facebook and Instagram, for instance, is not included on this class.

There isn’t any separate classification particular for tech corporations or a breakdown of how a lot tech workers earn in tech versus non-tech roles.

The sharp improve in wages of workers in tech corporations between 2001 and 2021 is attributed to the tech expertise crunch in Southeast Asia, together with Singapore. 

In the Southeast Asia Tech Talent Compensation report launched by enterprise capital agency Monk’s Hill Ventures and recruitment agency Glints in March 2021, tech roles pay the very best in comparison with different industries, because of the excessive demand however scarcity of tech skills in Asia, notably engineers and product managers.

The competitors amongst tech companies additionally contributes to the excessive demand and above-market charges for tech expertise.

BLEAK OUTLOOK FOR NON-TECH ROLES IN TECH INDUSTRY 

OCBC financial institution’s chief economist Selena Ling mentioned that the worldwide tech trade is going through some “indigestion currently” after the previous couple of growth years as a consequence of decrease world progress prospects, and the complicated geopolitical and coverage panorama.

“The salary expectations are a function of the industry growth prospects, so it is unsurprising that there is some moderation,” she added.

“That mentioned, digitalisation is a structural mega-trend, that means that demand will proceed to be resilient over time, simply that the expansion might be slower in comparison with the recent previous.”

Economist Song Seng Wun from CIMB financial institution mentioned it’s potential that the asking wage of non-tech employees in tech corporations will be decrease than pre-inflation and mass tech layoffs.

“Fundamentally, salary depends on demand and supply for a particular skill set. And because tech companies laid off (mostly) non-tech employees, it is clear that demand for non-tech employees is low,” Mr Song mentioned. 

He added that the recent tech mass layoffs might not essentially imply that non-tech employees within the tech trade will not be laid off sooner or later.

“In fact, if the economy worsens, we might be seeing more layoffs.”

Associate Professor Walter Theseira, economics lecturer from the Singapore University of Social Sciences, additionally mentioned that he expects fewer job alternatives for non-technical or engineering employees within the tech trade.

“When the tech sector was increasing, companies had the bandwidth and assets to interact in a lot of actions past their core technical competencies or merchandise.

“Now, they’re chopping what doesn’t contribute to revenues (non-tech roles). Thus, my present expectation is that the market might not have considerably affected skilled professionals with experience in engineering, coding, and technical roles and capabilities,” he added.

“But the number of opportunities is probably not good for people who were hoping to get into the sector with parallel skills or through conversion programmes and the likes, who do not have a background in tech.”

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