The Big Read: As headwinds grow, fresh grads adjust job expectations, embrace short-term contracts

SINGAPORE: When Miss Halida Thanveer Asana Marican started hunting for a job last December, she sent out only one or two applications.

But when she did not get any replies, the final-year student at the National University of Singapore (NUS) panicked and began to send out a batch of job applications every two weeks. 

After applying for about 30 job positions in all, the 24-year-old who majored in Life Sciences eventually landed a contract role as a research assistant after getting replies from four companies in April.

Fellow Life Sciences graduate Sankar Ananthanarayanan, 24, was luckier — landing a job on his first try. Describing his job hunt experience as “straightforward”, Mr Sankar applied in January for an administrative role at a local university after hearing about the opening from a friend.

“I heard back from the employers within a month and was offered the job in March,” he said.

However, like Miss Halida, Mr Sankar too will be on a year-long contract rather than a permanent appointment.

Short-term contracts, along with multiple rejections or even non-replies to job applications, as well as having to lower their job and salary expectations — these are what some fresh graduates like Miss Halida and Mr Sankar are experiencing, as their job hunt this year coincides with the United States-China trade war, which has cast a pall on the global economy and threatens to dampen Singapore’s economic growth in the months ahead.

While trade tensions between the US and China began in earnest last year, the situation escalated last month when the US increased tariffs from 10 to 25 per cent on US$200 billion worth of Chinese goods. China retaliated by slapping tariff hikes on US$60 billion worth of US goods.

The US also placed Chinese phone manufacturing giant Huawei on its export blacklist, amid concerns in Washington that Huawei’s devices could be used by China to spy on Americans.

Singapore, whose economy is highly dependent on global trade, will not be able to escape unscathed if the US-China trade spat is prolonged.

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Singapore Business Federation (SBF) chairman Teo Siong Seng said that apart from US-China trade tensions, the Brexit saga will also affect business, and consequently hiring sentiments. He said:

If trade tensions continue for a long time, it may affect global economic growth. Business sentiments will be more careful and hiring will slow.

Job prospects for fresh graduates, in particular, will be “tougher”. He added: 

I think businesses will only hire if they need to replace (staff), but not for expansion. You can also expect to see more contract jobs being offered to new hires.

Indeed, the job market situation appears to have turned. On Thursday (Jun 13), the Ministry of Manpower (MOM) issued its labour market report on the first three months of this year.

The report noted that while there continued to be more vacancies than job seekers, the demand for labour had eased following seven preceding quarters of increases. The seasonally adjusted number of job vacancies declined from 62,300 last December to 57,100 in March.

It also said that more workers were retrenched in the first quarter of this year, compared to the previous quarter as well as a year ago. The increase was driven by manufacturing and affected workers in production and electronics.

ON THE JOB HUNT

Given the rising economic headwinds, fresh graduates we spoke to had varying degrees of success in their job hunts, with several finding the going tough.

NUS graduate Jessica Ng sent out a grand total of 60 job applications between January and March, and heard back from only six companies — three public and three private.

The 23-year-old political science graduate said she became increasingly anxious when she had yet to secure a job by March, which her seniors described as a time when most graduates would know if their job applications were successful. Miss Ng eventually accepted an offer for a civil servant position in April.

Miss Halida, who also felt that she was taking longer than her peers to secure a job, had to change her strategy after realising that she was not getting any responses.

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“I was applying for management executive positions in the beginning which were not directly related to what I studied. I soon realised that it was very broad and you had to compete with graduates from other faculties,” she said.

She then narrowed her job search to positions related to her field of study, such as clinical research assistant posts, to increase her chances of securing a job. She also lowered her expectations and began applying to companies that offered lower starting salaries and positions that she was not keen on.

While she was lucky enough to eventually secure a 21-month contract job that met her pay expectations, Mr Abhiram Subramaniam, 25, was less so.

Mr Abhiram, who started applying for jobs in the media sector in April, said that he had sent up to 30 job applications within that month alone.

The political science graduate, who had briefly worked in the media sector after his National Service, shared that the process had been “tougher than expected”.

Given that I had prior work experience, I thought it would be easier for me to get a job in the media sector after graduation. But I still ended up receiving a lot of rejections and non-replies.

Mr Abhiram, who eventually found a three-month contract job in a media company, said that he is getting “quite below the average pay” compared to peers from his university course. He added that he is “biting the bullet” as it will allow him to grow his skill set and open doors to better job opportunities.

In comparison, some graduates from finance and accountancy courses had an easier time securing employment.

Miss Sandhya Rangarajan, a 22-year-old accountancy graduate from Nanyang Technological University, was able to secure a job with one of the Big Four accounting firms within three months of applying.

Her experience is typical of accounting graduates from public universities in Singapore, who could usually get a job with one of the Big Four by the time they graduate, said Mr Alvin Ang, the founder and director of talent acquisition at recruitment firm Quantum Leap Career Consultancy.

Meanwhile, several others who have yet to embark on their job hunt remain confident about their prospects despite the uncertain economic climate.

Mr Tan Shao Yun, a graduate from NUS’ School of Computing, said that he is expecting a “relatively easy” job hunt as he has heard from career talks and news reports that there is a high demand for computing students.

Sounding unperturbed that he is only just starting his job hunt while most of his peers have already found employment, Mr Tan, 25, is also considering overseas opportunities and will hold out on offers until he finds a role in data science or data analytics which will allow him to make “visible social change”.

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TAKING UP CONTRACT JOBS

Among the dozen fresh graduates from various fields whom we spoke to, most of them said they had applied for both permanent and contract-based jobs. To date, six of them have managed to snag a job, with half of them accepting contract-based roles.

The increased prevalence of contract jobs, due to a variety of factors including the rise of the gig economy, is well-documented.

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In its latest annual report on the labour market released last November, the Ministry of Manpower (MOM) found that between June 2017 and June 2018, the proportion of workers in permanent jobs dipped from 90.1 per cent to 89.4 per cent. Conversely, the proportion of those on fixed-term contracts went up from 6.4 per cent to 7.2 per cent over the same period.

The MOM report said that companies were more cautious with the economy undergoing restructuring, and they preferred hiring workers on a short-term basis.

Mr Ang from Quantum Leap Career Consultancy noted that employers are becoming more open to giving out contracts for one to two years, as this allows them to react quickly to changing business conditions.

“If there is a sudden economic downturn, and I, as an employer, realise there are some staff that I do not need, I can (let go of) the contract staff so that I can keep my permanent staff,” he said.

Decisions like this enable a firm to ensure its survival during bad times, he added.

Ms Linda Teo, the country manager of recruitment company ManpowerGroup Singapore, reiterated that in today’s business landscape, an agile and flexible workforce is “critical” to a company’s success.

“Hiring employees, especially in-demand talent, to fill permanent positions take longer in today’s talent-short climate and may cost more,” she said. “Hiring contract workers is a way for companies to ‘borrow’ external talent to complement the skills of their existing permanent headcount for urgent, short-term projects.”

Despite the possibility that those in contract roles could be easily let go by companies when the going gets tough, some of the fresh graduates interviewed said they are open to taking up contract jobs, prioritising other factors such as job scope or work environment in their employment pursuit.

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For NUS chemical engineering graduate Meera Sundar, 22, it was not “a big deal” for her whether an available position is permanent or on contractual basis.

“The only major difference is that if my contract runs out, I will probably have to find another job in two years or so. But I know if I do well in the company, I can still get converted to a permanent position,” said Miss Meera, who sent out 40 job applications over six months.

Her foremost concern then was to secure a position that is relevant to her field of study, and she eventually managed to find a suitable full-time job.

Her sentiments were echoed by Miss Aisha, a 21-year old student from the Singapore University of Technology and Design who will be graduating in August.

Miss Aisha, who only wanted to be known by her first name, said her main concern is getting a job that is related to her field of study in information systems, regardless of whether it is a contract or full-time role.

“It’s experience either way,” said Miss Aisha, who has yet to find a suitable job. “I still welcome that at this stage. If I have financial commitments in future, then I will not say no to a permanent job.”

For Miss Halida, the contract position which she snagged gives her the flexibility to decide on future options, such as pursuing further studies.

Ms Teo from ManpowerGroup said there appears to be a shift in mindset towards contract work among job seekers, including fresh graduates.

“Fresh graduates like working in contract jobs as they can experience different job roles and environments while building up their skills. For existing workers, working in contract jobs enable them to better manage their time,” she said.

Mr Ken Ong, a manager at recruitment firm Michael Page, pointed out that there has also been a corresponding shift in how firms perceive contract positions: When these roles started emerging three years ago, those who held contract positions were mainly hired to clear the backlog of  work or cover certain roles temporarily.

Those hired on contract did not have a sense of purpose in their work or belonging for the company. However, this has changed with companies extending equivalent benefits to both contract and permanent staff, said Mr Ong.

Fresh graduates are now attracted to contract roles as these allow them to experience a spectrum of roles, rather than to specialise in one for a long time, he reiterated. They also see such roles as opportunities to gain “deeper understanding of the job responsibilities and working culture” before committing to a longer term career, he said.

There are also tangible advantages of having a contract job, said Quantum Leap’s Mr Ang. For one, employers are prepared to pay more to attract talent to fill contract jobs. Those in contract roles are also in a better position to negotiate for a pay rise when their contracts are due for a renewal.

OVERALL JOB MARKET OUTLOOK

As fresh graduates continue to look for jobs, their hunt is unlikely to be aided by US-China tensions.

A periodic survey of 3,600 Singapore-based small and medium enterprises (SMEs) showed that there was an easing of business sentiment and increased caution among SMEs.

Published in March by the SBF and DP Info, the latest SBF-DP SME Index — which measures the business sentiments of SMEs from April to September this year — showed a dip from 50.7 to 50.4 from the first to second quarter of this year. This was the fourth consecutive quarter with a lower reading.

In particular, business sentiments of SMEs in the manufacturing sector contracted for the first time in the past eight quarters, with the index dipping from 50 to 49.7. The next index will be released in July.

Mr Kurt Wee, head of the Association of Small and Medium Enterprises (ASME), said that there are signs of overall global trade shrinking, which do not bode well for Singapore’s economy.

However, the impact of the trade war on the job market will only be evident one or two quarters down the road, he said.

He added that while companies that are growing are still keen to hire and groom young talent, the increasingly cautious outlook could dampen the rise of starting salaries rather than the number of jobs available.

Mr Wee said that companies which are currently looking for regional opportunities— to hedge against any downsides in the trade war over the next two to three quarters —  could also defer hiring until their operational structures are more defined for the longer term.

The manufacturing and logistics sectors are likely to be more cautious than others in hiring, given that these sectors are likely to be most affected by the trade war, he said. 

WHAT COMPANIES SAY 

Apart from the banking and finance sectors, the public sector, as well as companies in the business process outsourcing services, system integration, and information and communication technology sectors are particularly open to hiring fresh graduates, according to Ms Teo from ManpowerGroup.

Mr Alwin Liang, founder and chief executive of logistics firm Roadbull Logistics, said that the US-China trade war has the potential to create uncertainty within the local logistics sector and may result in logistics companies reducing their intake of employees.

However, he felt that there are benefits to be reaped from the situation. For one, the trade war could motivate local companies to improve efficiencies within their own companies to counter the volatility in prices.

Also, some Chinese companies could relocate their production to Southeast Asian countries, including Thailand and Vietnam. This will allow logistics businesses in Singapore to benefit from higher maritime activities, transportation, and storage from neighbouring countries. This could in turn drive up hiring in the industry, Mr Liang said.

Responding to media queries, several members of the Singapore Manufacturing Federation (SMF) noted the potential impact of the US-China trade war on job prospects for fresh graduates.

Mr John Kong, group chief executive of construction company M Metal, said the electronics industry would be the first to be affected in Singapore, given that it mainly produces chips for electronic devices.

With the US banning its companies from doing business with Huawei, companies in the electronic industry will hold back their investments to see how the trade conflict plays out, he said.

He added that eventually, the manufacturing sector could be affected — specifically, companies that are part of the electronics industry supply chain, such as precision engineering and component engineering manufacturers.

Mr Edwin Tay, business development manager at medical technology company NeuMed, said that manufacturing companies would prefer to hire experienced workers who can hit the ground running. As a result, some fresh graduates could have difficulty finding jobs for some time, he noted.

Nevertheless, Mr Sanjay Trivedi, the chief executive of medical technology company Technithion International, believes that with Chinese companies expanding into regional markets, hiring in the manufacturing sector could be sustained if Singapore companies expanded overseas, including into other Southeast Asian countries.

SMF president Mr Douglas Foo stressed that despite challenging times, there are opportunities for fresh graduates in the manufacturing sector, so long as they are willing to learn and prepared to work in an environment of constant change and technological advancement.

ADVICE FOR FRESH GRADS

Given that the region might benefit to some extent from the US-China trade war, SBF’s Mr Teo urged fresh graduates to consider working overseas — not just in “nice countries” but also the “tough ones” among the members of the Association of Southeast Asian Nations (Asean).

“ASEAN is a bright spot in the world economy. It offers a lot of good prospects and I encourage young people to take it on, even if it is just an internship stint,” he said.

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Mr Ang from the Quantum Leap Career Consultancy reiterated that the Singapore economy is not in such a bad shape that fresh graduates have to start looking overseas for job opportunities. Nevertheless, they could still explore working in companies based in the Asia-Pacific such as Hong Kong or China to broaden their horizons, he said.

Michael Page’s Mr Ong called on fresh graduates to value exposure over stability, although their decision on whether to work out of Singapore should depend on the industry.

Those who wish to be in the manufacturing industry can remain in Singapore, which is the hub for high-end manufacturing, while those keen on banking and finance could also consider Hong Kong, he said.

Exploring different markets to gain experience and skills could be even more important these days, given the rising prevalence of contract jobs.

Ms Teo from ManpowerGroup noted that in such an environment, fresh graduates should aim to build up their repertoire of hard and soft skills which would allow them to adapt to shorter skill cycles and changing work demands.

For those who are concerned that they may be seen as “job-hoppers” by taking on contract roles, Ms Teo said that employers are aware of the growing trend and are open to candidates who have taken on multiple contract roles.

Nevertheless, job seekers should be upfront with prospective employers about their contract roles and emphasise their skills in order to appeal to them, she added.

However, Mr Ong believes there are still employers who view those who held contract jobs previously as “job-hoppers”. The onus is on hirers to learn more about the candidate’s previous job performance and his or her rationale in leaving the role, he said.  

Whether a person is in a contract or permanent role, companies will strive to retain the individual so long as he or she performs well.

“If you are deemed valuable in the company, hiring managers from different departments will try to place you because no company will simply want to lose a good employee,” said Mr Ong.