With the fall in total unemployment rates to 2.7% in August as a result of easing of labour demand, Manpower Minister Tan See Leng said that Singapore’s unemployment rate over the long run is set to slow a gradual recovery through 2022. With the gradual rebound in economic growth, staff turnover rate is also increasing with an increased resignation rate of 1.6 percent in the second quarter as compared to the year before. Similarly, 69 percent of Singapore firms reported a marked spike in turnover in the first half of 2021 in comparison to 2020. Retention rates have also dropped by 22 percent for high-performing local talents and 17 percent for foreign talents. Sectors that experienced the highest turnover rates include engineering, sales, logistics, and supply chain industries.
 
Why workers are resigning at such high rates

Although high resignation rates could be problematic for companies in talent retention, some economists believe that this is not merely a sign of economic recovery.  In fact, they believe that job quitters drive the economy to rebound.

Data from the UK suggested that job hoppers tend to find new opportunities that allow them to move up the career ladder into roles that better tap on their skill sets. The median hourly earnings increase for job hoppers was at 7.3 percent in 2018, as compared to 3 percent for job stayers. Another study from Australia in 2019 found that higher turnover rates were associated with higher salary growth. OECD also reported higher productivity with the shifts in labour reallocation in the jobs market. Those who work in lower-paid sectors in the US such as food and hospitality or retail also experienced higher wage growth at 4.1 percent as compared to those who remained in their jobs (3.1 percent). It seems like the big quit, or the wave of high resignations shows that workers are taking advantage of the tight labour market to up-bid their salary and working conditions.

How to retain your talents
Of course, most companies would look towards poaching and driving up wages for high-demand positions in industries such as research and development, life sciences, healthcare, and technology. Salary increases could be as high as 25 percent for tech roles in fintech or e-commerce, a significant uptick from 10-15 percent in previous years. 44 percent of firms are also adjusting their remuneration package for current employees -- higher base pay with larger allowances and bonuses.

Other than salaries, companies should also consider redesigning job scopes to cater to the needs of employees on work-life balance and personal well-being. Increasingly, more and more candidates are reviewing job offers as a whole--not just in monetary terms but also flexible work arrangements, allowances, and other benefits. Employers and staff who are willing to invest in skills upgrading would also benefit from structural support from the government e.g. sharing costs in reskilling existing staff to replace job quitters.

What are your thoughts about high turnover and resignation rates in the local labour market? What other initiatives can be put in place to encourage your employees to stay?