Rise in Onshoring at Singapore’s financial services operations: Robert Half Survey

Singapore, 11 October 2017 – New independent research commissioned by specialised recruiter Robert Half has found Singapore’s financial services companies are increasingly bringing their offshored operations back to the city-state as companies are being affected by rising costs and a growing skills shortage in offshore regions, potentially leading to more jobs in the financial services sector.

With Singapore ranking as the world’s No 3 financial centre, the research has found almost half (44%) of Singapore’s financial services CFOs have increased their level of onshoring – transferring offshored business operations back to Singapore – in the past two years, compared to 10% who have decreased their onshoring activities. A further 50% have increased their level of nearshoring – transferring operations to a nearby country in preference to a more distant jurisdiction – in the past two years.

66% of CFOs within financial services refer to the rising costs and 59% point to the skills shortage in offshore regions – indicating a financial and manpower motive as  the main cause of increased level of onshoring. In terms of the quality of their operations, 48% further cite service complaints in offshore regions and 43% identify the lack of efficiency as one of the key reasons for transferring offshored business operations back to Singapore.

“Singapore’s financial services sector operates within a highly competitive global market with companies being under increasing pressure to maximise cost effectiveness, efforts only aggravated by a growing regional skills shortage. With the lack of skills in the offshore regions driving Singaporean financial services organisations to bring back activities to the city-state, this could potentially boost local employment within the financial services sector, resulting in an improvement in Singapore’s competitive position within the region” said Matthieu Imbert-Bouchard, Managing Director at Robert Half 

In an indication that offshoring is not just a cost decision, but also a matter of dealing with the skills shortage in Singapore, more than four in 10 (43%) CFOs within financial services would consider shutting down offshore activities and return their operations to Singapore if the specialised skills they require would be available locally.

Onshoring can result in tangible benefits for Singaporean companies. Almost half (47%) of Singapore’s financial services leaders who have returned business activities to Singapore say it has resulted in increased productivity, followed by an increase in service quality (44%), greater customer responsiveness (44%) and an increase in cost efficiency (39%).

“While a lack of skills in offshore regions are pushing certain financial services organisations to onshore their activities back to Singapore, there are still local financial services organisations with similar aspirations that are feeling hindered by the skills shortage in Singapore. The lack of local talent in key functional areas within financial services needs to be addressed as it can potentially lead to more operations finding their way (back) to Singapore, with positive knock-on effects for employers and the economy,” concluded Matthieu Imbert-Bouchard concluded.

Global Business Monitor survey takes stock of growing SME needs in Singapore

SINGAPORE, 26 September 2017 – In a survey by independent financial services firm small and medium enterprises (SMEs)1 in Singapore remain upbeat over the local economy in the next 12 months, despite the political situation in the U.S., China’s slowing growth, protectionism and declining international trade. Overheads, currency fluctuations, lack of skilled staff and poor cashflow management on the other hand, were flagged as growing concerns to SMEs.

Conducted annually by Bibby Financial Services (BFS), the Global Business Monitor today surveys SMEs in 11 countries across Europe, the U.S., and Asia; on their sentiment towards the economy, access to finance, opportunities and threats. This is the first year it features Singapore, with data from sectors such as wholesale, business services and manufacturing.

“Singapore SMEs are generally confident of the local economy and friendly government policies available,” said Mr Alan Wong, Managing Director of BFS Singapore. “However, to fund new growth and manage issues presented by slow customer payments, many are turning to alternative options such as Receivables Financing.

This trend is reflected in the year-on-year growth in invoices factored at BFS, projected to be more than 20% in 2017 and 2018. We see more demand for Receivables Financing in manpower supply and manufacturing sectors such as precisions engineering and electronics.”

KEY SURVEY HIGHLIGHTS Whilst results of the survey reflect SMEs’ confidence in Singapore’s strong fundamentals and economy, they also show that rising costs (67%), currency fluctuations (54%) and lack of skilled staff (53%) continue to be top concerns. Many SMEs see such scenarios continuing into the next 12 months.
Concerns around slow payment 68% of respondents said that chasing customers for payments was the most problematic aspect of cashflow management. Those polled noted that a vast number of their customers take 30 days or more to make payment (79%). while 18% take in excess of 60 days to pay. Compared to other markets polled in the survey, businesses in Singapore wait the longest for payment – an average of 45 days. Conversely, SMEs in the U.S. are paid up to 14 days earlier.

Bad debt that has led to financial losses A third of respondents attributed bad debt over the past 12 months to customer non-payment or insolvency. This cost 34% of those polled, financial losses in the range of S$10,000 to S$100,000, and another 15% of the respondents more than S$100,000 in losses.
Singaporean business owners ranked third after Germany and the UK, on the amount of money written-off as bad debt over the last 12 months (€35,000 or S$56,000). The impact of bad debt was so far-reaching, that 35% experienced how it affected business growth and profits, and another 6% were forced to lay off staff as a result.

Financial readiness to secure SMEs’ next stage of growth Despite challenges surrounding cashflow and payment practices, Singapore remains a key financial centre of the world. Nearly half of the respondents (49%) believe that availability of finance in Singapore is excellent or good, although one in ten expressed concerns around high interest rates.

Mr Wong concluded, “Generating sales and growth is key but the ability to fund it and collect payment from the debtor is of equal importance. At the end of the day, financial readiness will not only help mitigate some of the challenges SMEs face, it will also better enable them to capture opportunities presented in the new economy. We have to look past ad hoc financing.”

1 Today, some 99% of the 216,900 businesses in Singapore are SMEs. Source: Department of Statistics Singapore
2 Source: SPRING Singapore

Filipinos’ top concern: Higher salaries

Filipinos are most concerned about increasing workers’ pay, according to a recent Pulse Asia survey, reported Metro Manila – CNN Philippines.  Nearly half of Filipinos (46 percent of 1,200 respondents) nationwide believe the Duterte government should prioritize increasing wages. Workers’ pay was cited as the topmost concern of Classes D and E across the country. For Classes A, B, and C, the rising prices of goods is their main concern. But improving workers’ pay comes a close second.

Aside from higher wages, other top concerns of Filipinos are creating more jobs (38 percent) and controlling inflation (37 percent). These are followed by fighting corruption (32 percent), reducing poverty (32 percent), and fighting criminality (31 percent). Which issues do Filipinos care about least? These are terrorism, national territorial integrity, and lastly, charter change. 

The survey also shows that most Filipinos are happy with how the government is handling national issues. The government’s anti-crime efforts are appreciated by most Filipinos (89 percent). Controlling inflation, however, got approval from only 51 percent of respondents. 

This Pulse Asia “Ulat ng Bayan” survey was conducted from September 25-October 1 through face-to-face interviews. It has a ± 3% error margin at the 95% confidence level