In the last decade, Southeast Asian countries saw a growth in number of Western expats arriving with an ambitious, but short-term goal in mind. Multinational corporations offered expats a generous package that has an attractive compensation and housing options. These expats were more than willing to come and work in Asia for the experience and for the compensation. However, now the trend is shifting.
In the last few years, hiring trends in China has transformed: from acquiring talents from abroad, to hiring locally. It is true that some companies are leaning towards foreign talents for their experiences, but they now prefer to hire expats with minimum of five years stay in the country.
The same behavior is also visible in Singapore, where expats are receiving local pay packages instead of a specialized expat packages. This started in 2009, when a survey of 200 companies revealed that already 21% of the expat workforce was already receiving local pay, with perks such as partial allowance for housing.
With centers in Singapore, China, and Jakarta, CEO SUITE has witnessed the boom of these cities in the recent years and put preference on hiring local talents instead. In Jakarta, the Manpower Ministry has issued that companies must follow a ration of 10:1 favoring local employees to expatriates. This resulted to the decline of number of Jakarta’s foreign hires—from 68,957 in 2013 to 64,604 in 2014. In fact, expats in Indonesia are now required to learn Bahasa prior to getting their working permit.
All of this has resulted to a smaller wage difference between locals and expats. Consequently, compensation packages no longer primarily rely on which country candidates come from, but on the overall supply and demand of talent. Therefore, with the increasing talent pool diversification in Asia, both local and foreign workers are required to highlight their unique traits, bundled with local and global knowledge. That way, they will be able to get the spotlight from businesses in Asia and also to survive the competition.