Asia's high-tech industry: Five ways companies can navigate their skills journey
The high-tech industry in Asia is at a critical juncture, facing challenges such as significant geopolitical shifts, emerging new artificial intelligence (AI) tools, changes in the business landscape, and rapid innovation in tech skills. To effectively navigate and adapt to these shifts, companies need to embark on a skill-based transformation journey to address gaps in an evolving landscape, or risk extinction.
The ‘obsession’ over efficiency and the emergence of AI has led to the recent waves of layoffs in the tech industry. For instance, Meta cut 10,000 jobs to improve efficiency by refocusing their resources toward AI. Other companies followed suit, and the sector made 262,000 redundancies last year.
In Asia Pacific (APAC)’s largest economies, nearly 63 million jobs are expected to become obsolete due to automation by 2040 according to Mercer’s Asia High Tech Snapshot report. Despite the grim report, 36% and 47% of tech companies in China and India respectively have indicated their intention to increase their workforce.
This shows that skills in demand are evolving and there is a pressing need to source the right skillsets to counter tech talent shortages and to future-proof these jobs against disruptions.
The battle for the right tech talent
Figure 1: Non-exhaustive overview of the hottest skills in Asia
The list above shares the tech skills in demand in Asia. To stay sustainable, business growth needs to be supported by the acquisition of the right skills. During 2023, up to 45% of companies in APAC were looking to pay premiums for in-demand tech roles.
However, grappling for tech talent in a tight labor market against competitors and other industries is not sustainable or cost-effective. Instead, a skills transformation journey can better support companies in quickly adapting to changing demands and meeting business priorities. But where do high-tech organizations start?
Playbook for Asia’s High-Tech industry: Five ways companies have embarked on a skills journey
1. Understand what are the ‘hottest skills’ required
A multinational bank with operations concentrated in Asia wanted to deploy the right skills to areas where the biggest opportunities lie..
In collaboration with Mercer, the bank established a governance framework to identify these hot skills and developed a business case with a return on investment (ROI) model to measure the impact of their initiatives. A pilot program was launched in the technology sector to assess mission-critical skills, leading to the identification of essential engineering skills and the creation of a skills architecture.
As a result of this transformation, the bank improved its access to essential skills and established a prioritized approach to skills and job architecture.
2. Facilitate talent mobility with a better skills taxonomy
A Fintech SaaS unicorn in India wanted to support a well-labeled job architecture to enable the movement of employees across roles and teams. In this project, Mercer utilized its proprietary methodology and skills framework to develop a skill taxonomy to define critical experiences for career progression. Additionally, Mercer established a talent management framework that includes progression guidelines, accelerated career progression policies, and 360-degree feedback alongside individual development reports.
Furthermore, Mercer defined the organization’s job architecture encompassing 16 job families and 170 unique roles, mapping skills proficiency levels to each role.
A high-performance Performance Management System (PMS) framework was also created, anchored on objectives and key results (OKRs), aligning with the company’s values and goals. This framework facilitated leadership feedback and development, which were crucial for enhancing talent mobility within the organization.
3. Improving talent retention and attraction through skills-based rewards
A multinational IT services company headquartered in India aimed to create a skill-based career architecture to prepare for future organizational needs. Mercer assisted in developing a compensation strategy aligned with this architecture, ensuring it was consistent, scalable, and sustainable across 17 countries, including India, the US, and the UK.
Mercer utilized its job library and data, successfully mapped role variants, and conducted skill mapping for each position, linking roles to grades and career levels. This led to high agility and internal equity within the organization at the right cost and price.
The company was also able to develop a proficiency-driven compensation strategy after finding out that 81% of its employees are covered in the top 100 of over 500 skill combinations.
4. Provide better training for the lack of proficiency
A multinational automotive organization with operations in China embarked on a technical skills transformation journey to define competencies in its research and development (R&D) and technical business functions.
Mercer assisted the organization in designing a competency framework for internal evaluations across career levels and job families. This helped foster the creation of a talent development path.
By defining competencies across career levels, the organization was able to establish distinct career path standards and indicators for the dual-career streams. It also allowed the organization to recommend knowledge-centered training and learning mechanisms and created opportunities for employees to take on the roles of technical trainers or global mentors.
5. Being employee-centric at the heart to skills transformation
A company's journey toward skills transformation cannot be deemed complete or successful without placing employee needs at the forefront.
In the current tech landscape, adopting a human-centric approach is not merely a strategy; it is vital for organizational success, particularly in initiatives like skills transformation. As tech employees in Asia increasingly seek, and are used to, better benefits and flexible working arrangements, organizations must acknowledge that rising healthcare costs and economic pressures have shifted employee expectations toward enhanced well-being support. To address these aspirations, companies need to implement innovative, employee-centric strategies that prioritize flexibility, comprehensive benefits, and overall well-being. By strengthening their employee value propositions, organizations can effectively attract and retain top talent in a competitive market.
For instance, a multinational IT and consulting company in Singapore partnered with Mercer Marsh Benefits (MMB) to evaluate its existing benefits plan and identify gaps in its policy. The assessment revealed that health devices such as hearing aids, mobility aids, and orthotic devices were not covered. In response to this feedback, the company revised its policy clauses with insurers and secured a quote to enhance the policy, eliminating the need for employee self-funding. This proactive approach positioned the company as a pioneer in its sector by offering inclusive benefits, significantly bolstering its efforts to attract and retain talent.
Ultimately, prioritizing employee well-being beyond skills is a fundamental element of sustainable success in the tech industry.
