ICT companies with trained workforce performed better than their peers

COVID-19 has accelerated the need for technological adoption across industries, resulting in a surge in demand for tech professionals in Singapore. Already in short supply for several years before the pandemic, the manpower issue is exacerbated by an expected 60,000 new tech roles over the next three years in the nation’s bid to meet grow its digital economy, and unpredictable cross-border travel restrictions.

The World Economic Forum had also predicted that by 2025, 85 million jobs may be displaced, and 95 million new roles may be created due to a shift in the division of labour between humans and technology.

Against this backdrop, it is essential that ICT companies foster a Singapore workforce that is trained in the latest technological skills in order to remain resilient.  While it is understandable for companies to want to hold back on training during economic instabilities, our research suggests that a trained workforce contributes to a more positive business outlook as well as better outcomes in the long run.

READ ALSO: What makes a good tech training programme 

One in Three ICT Companies in Singapore Provided Formal Training to Tech Workforce

On average, about a third (32 percent) of ICT companies in Singapore had sent their Singapore-based tech employees for formal training in 2019. Training incidence surged in Q1 2020 (47 percent) but dipped significantly in the following quarter (Q2) to 37 percent when the global pandemic was at its peak in Singapore. Yet, for the rest of 2020, the number of tech companies that provided formal training held steady and did not fall below pre-pandemic levels. This encouraging trend suggests the ICT industry recognizes the value of ensuring a trained tech workforce.

Impact on Manpower Growth  

Skill development is no longer seen as a perk or an option by today’s workforce. According to LinkedIn’s Workforce Learning Report, an overwhelming 93 percent of employees said they would stay at a company longer if it invested in their careers.

The BSS found that about half (53 percent) of the ICT companies in Singapore that provided formal training to their tech employees, had significantly higher employee growth. Reasons for this might be multi-pronged – emerging technologies had created new job opportunities; new hires needed to replace job redundancies; business recovery or expansion. Regardless, the positive correlation between companies investing in their employees and experiencing growth bears further study.

Among tech companies that did not send their local tech employees for training, more (59 percent) were expecting their headcount to remain unchanged, than to increase (33 percent).

This trend was consistent quarter-on-quarter, even during the first half of 2020 when the negative impact of COVID-19 was at its peak in Singapore. This suggests formal training to be an effective method in attracting tech talent.

Impact on Revenues

Significantly more ICT companies which had sent their local tech workforce for formal training, were observed to report an increase in year-on-year revenues.

ICT companies that had provided formal training also reported significant improvement on revenues quarter-on-quarter.

Impact on Economic Outlook

Economic uncertainties stemming from the pandemic have depressed local business sentiments. Between 2020 Q1 and Q2 when the global health crisis hit Singapore, there was an observed sharp rise in pessimism among local ICT companies on Singapore’s economic outlook and the overall local tech industry. Interestingly, companies that had provided formal training for their tech workforce in the subsequent quarters despite the enduring effects of the pandemic, expressed a more positive business sentiment. Such optimism may be led by the knowledge that their businesses would be supported by a trained workforce that is able to meet new market demands.

These findings suggest a correlation between companies that invest in their employees through formal training, and their business’ adversity quotient.

The shortage of tech talents that had existed for several years before the pandemic, will only intensify over the next few years. In addition, many companies may not have the budget to hire new tech talents given the current economic uncertainties. Studies have shown that hiring a new employee costs six times more than reskilling someone within the company. Therefore, retraining current employees may be a reasonable solution to close skill gaps and meet evolving market demands.

Besides helping businesses adapt to evolving market demands more quickly, what other benefits does a trained workforce provide? Stay tuned for our next analysis.

For more information about the assistance grants and schemes available to help local businesses with their training needs, visit our one-stop resource page to browse assistance schemes grouped according to business stage/function. You can also use the e-adviser on GovAssist to find schemes relevant to your needs.

For more information about IndSights Research’s Business Sentiment Survey, or findings on specific sectors, please contact us here.

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