Why taking a pay cut could be your career salvation in Singapore
If you’re worried that your back-office job in Singapore will soon fall victim to offshoring, the best way to get your career back on track may be to work for less money and hardly any benefits. In other words, take a contract role.
“Candidates in Singapore need to get over their fixation of only looking at permanent roles – these are few and far between in the ops space because it’s now too costly to locate them here,” says Kyle Blockley, managing partner at recruiters KS Consulting in Singapore. “Many perm back-office jobs are being offshored or have been already.”
In contrast to permanent vacancies, contract opportunities in the back office are on an “upward curve” this year, says Jake Bridge, APAC contracts director at Phaidon International. Ironically, some of the demand for contractors in Singapore is driven by projects to relocate roles away from the country – banks need senior contractors to manage offshoring and need more junior people to perform interim operational tasks from Singapore while new offshore teams get to speed.
Regulatory-implementation and IT-upgrading projects are also fuelling demand. “If the work is project based, business critical, and has a budget and a timeline, it makes sense to hire a contractor to manage it as it has a determinable end-date,” says Bridge.
Almost all of the people taking these contacts, however, are doing so with an eye to be made permanent after the end-date. “A contract opportunity offers you the platform, based on performance, to develop a career within a bank,” says Bridge.
For cost-obsessed banks in Singapore, making a contractor permanent is less risky, less expensive and more likely to gain budgetary approval than recruiting an external candidate. “If you’re hired as a contractor and prove yourself, any decent organisation will do their best to extend your contract or make you perm,” says Blockley from KS Consulting.
The belief that contracts provide a potential first step to long-term career stability is helping to increase the traditionally low supply of contract workers in the Singapore finance sector, at least in the back office.
“The perception of the contingency market is improving as more people are becoming accustomed to higher-volume contractor recruitment,” says Bridge. “For more generic positions, candidates are more flexible to go on contract roles, but front-office talent is more averse,” says Mark Hall, country general manager of recruiters Kelly Services in Singapore.
While as recently as two years ago the Singaporean contract market was dominated by large foreign commercial banks (in particular Standard Chartered, HSBC and Citi), the three domestic banks (DBS, OCBC and UOB) are now increasingly using them.
So-called “career contractors” – those who chose to move from one short-term assignment to another – remain rare in Singapore. While contractors’ lot is slowly improving in Hong Kong, contractors in Singapore are typically paid less than their permanent counterparts and don’t enjoy the same benefits, says Hall from Kelly. Obtaining a work permit for a foreign contractor under Ministry of Manpower rules can be difficult.
“Unlike in the UK, US or Australia – where you get paid a premium because you bring value at a time of need – contractors in Singapore are treated like they’re not part of the business, with limited holidays, limited medical. With the exception of some senior interim-management roles, there is no incentive for being a contractor here, aside from as a path to a perm job. You are absolutely worse off,” says Blockley.
“In London, for example, there is a significant tax advantage to contracting, which doesn’t exist in Singapore. And there is often a perception in Singapore that a contractor is, by definition, a low-level member of staff,” says Bridge from Phaidon.