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Data Analytics - How bad is the IT talent shortage in Singapore?

We have written extensively about the growing demand of IT skills in Singapore in our previous posts

In this post, we use data published by Singapore's Ministry of Manpower to illustrate (1) the shortage of IT skills and (2) the impact of border closures within Singapore's Workforce.

Singapore was facing a growing shortage of IT skills since 2013

The Job Vacancy Rate published by Ministry of Manpower measures the percentage of unfilled jobs within Singapore's economy and goes as far as to break it down by sector across time. There will always be a baseline vacancy rate due to natural attrition of employees, which appears to be around 2.5%.

Since 2013, the vacancy rate rate within the IT sector started to be persistently higher than the national average, indicating early signs of a tach talent shortage.

COVID has accelerated digital transformation trends resulting in a much higher demand of IT talent

Never would we guessed 2 years ago that everyone would be doing meeting virtually, working from home, and buying groceries online. There is little doubt that has pulled forward digital transformation by about 3-5 years.

Trends in consumer behavior and economy translate into the types of skills that companies need and that is exactly what we see in the data - Since COVID started, demand for IT talent has increased resulting in a massive shortage. This conclusion also corroborates with MOE's graduate pay data highlighting an 8% jump in IT graduates starting wages. A trend we do not see abating anytime soon.

Job vacancy rates outside of the IT sector have also increased

Counter-intuitively, COVID has not just tightened the labor market for IT professionals, but across all sectors despite a weaker economy. This is due to Singapore's reliance of foreign workers from neighboring countries.

As the borders are restricted since COVID started, foreign labor supply was restricted and companies could not replace foreign workers who leave with new supply. This could also be the reason why the labor shortages did not manifest until 3-4 quarters after the start of COVID.


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