The talent market is often a reflection of the prevailing economic environment. Riding on trade tensions and monetary and political policy, global growth is pegged at 2.4% in 2019, and expected to increase to 2.5% in 2020. Interestingly, much of this growth is expected to be spurred by emerging markets and developing economies (EMDE), which are expected to grow at 4.1% from 3.5% last year*. Advanced economies are predicted to decelerate, from 1.6% (2019) to 1.4% (2020). East Asia and Pacific prove to be a mixed bag, with some advanced and some developing countries creating a paradox. Overall GDP growth in APAC is expected to drop to 5.7% in 2020, from 5.8% in 2019. 

Country-wise economic and talent landscape 

Here is a close look at how these economic indicators pan out from a talent viewpoint: 

• Japan: 2019 proved a rough year for Japan, with the advent of Typhoon Hagibis, increase in VAT, and a mellow manufacturing and exports outlook. Despite this, the unemployment rate remained near multi decade lows, and labour-force participation continued to climb. Talent shortages continued, stemming from the demographics of an ageing and declining population. In 2020, growth is predicted to slow down to 0.7% from 1.1% in 2019. Hiring increased in cloud computing, AI, future mobility and smart factories in 2019, and shall continue in preparation for the rollout of 5G in 2020. 
• China: Lowered domestic demand and trade tensions led to multi-year lows of 6.1% growth, expected to further reduce to 5.9% in 2020. This is the first time China will register sub-6% growth since 1990. The impact on the labour market is evident, with professionals showing reluctance to switch organizations amidst such uncertainty. Certain manufacturing work was also outsourced outside mainland China, to avoid the US tariffs, thereby impacting the hiring outlook.   
• Southeast Asia and South Asia: Indonesia and Thailand may see some positive growth, expected to increase 0.1 and 0.2 percentage point respectively. The same economic sentiment reflected in the labour market of 2019, with hiring catching up, particularly in the high-growth markets of Indonesia, the Philippines, Thailand and Vietnam. Singapore is expected to stabilize, with Q3 YoY growth settling at 0.5%*** versus the predicted 0/1%. Hiring activity remained steady, fostered by rise of data-driven approach in business. In 2020, Singapore expects high hiring activity driven by tech-transformation. A key factor in APAC is businesses going international, creating a strong demand for global talent i.e. professionals with a strong understanding of both global business practices and local cultural mindsets. India is expected to make a slight comeback, with growth expected to increase from 5% to 5.8%. Pakistan and Bangladesh, however, are expected to slow down. 
• Hong Kong and Taiwan: 2019 proved challenging for Hong Kong due to ongoing political and economic uncertainty. Traditional financial services firms got cautious about hiring. 2020 is expected to see growing demand for specialists in areas of finance, legal, technology and risk and compliance, operations, HR, analytics, big data, DevOps and digital specialists. Taiwan saw an inflow of work in areas of technology, FMCG and healthcare, stemming from the offshoring of work from Mainland China. This demand for technology and software specialists is expected to continue into 2020.
• Australia and New Zealand: A mellow economic environment may prevent any widespread jobs and salary growth in the near to mid-future. Sectors such as technology, financial services and infrastructure may prove the exception due to demand-supply dynamics and Australia’s Royal Commission-led compliance-focus. 

Salary predictions

While exact salary predictions may be difficult to pinpoint at this juncture, companies can expect some prevalent trends as they devise their talent and rewards strategy for the decade ahead. An ECA International Salary Trends Survey 2019/2020 reveals that 13 out of the top 20 increases in real salaries will be seen in Asian countries, with these countries occupying the top five spots globally according to forecasted real salary increase for 2020:

• India: 5.4% (2019: 5.6%)
• Vietnam: 5.1% (2019: 4.0%)
• Indonesia: 4.6% (2019: 3.8%)
• Cambodia: 4.2% (2019: 3.8%)
• Thailand: 4.1% (2019: 3.9%)

The average real salary increase in the Asia Pacific region is forecasted to be 3.2%- significantly higher than the global average of 1.4%. Yet, as the talent crunch tightens and employee demographics become more complex, salary can no longer be the sole tool for engaging and retaining employees.

Here is how companies can meet the talent-needs as per their regional presence: 

• Japan: Global mobility policies can help meet the demand for bilingual talent with international or global business exposure. Employers must offer learning opportunities at the confluence of technology and healthcare, thereby building the much-needed digital talent. As the Equal Pay for Equal Work is expected to materialize in 2020, employers must utilize contractors to seek specialised talent at short notice. 
• China, Hong Kong and Taiwan: Despite the trade war, the technology sector had and will continue to see a talent flux. Due to tech-skills shortage, employers must focus on retention strategies. Career development opportunities and guidance, flexible working policies, and a culture of digitalisation and innovation should be top HR priorities in this region. Mainland China is expected to see moderate salary increases, while in Taiwan, compensation is expected to be steady. 
• South East Asia and South Asia: An acute shortage of expert, well-rounded talent is compelling employers to hire for potential, and also for transferable skill sets over market sectors. For example, FMCG businesses are hiring technology talent from financial services or retail. To aid this, HR must build talent from within, with the right L&D opportunities and by offering challenging assignments that allow employees to deliver value to the business. A great idea to seek ‘glocal’ talent is to tap into the pool of local professionals based overseas and create “Returning Home'' campaigns..
• Australia and New Zealand: As this region remains committed to long-term nation-building programs throughout 2020, attracting specialists for a sustained high performance will be much more about benefits. Cutting-edge projects and skill upgradation opportunities, flexible working, contractual work opportunities with premium pay, and hiring for potential rather than for immediate skill-match must be the key lookout areas for employers in 2020. Tightening immigration laws means that employers must build a strong international talent network as well as seek expert, up-to-the-minute skilled migration advice and support. 

One thing is clear, winning the war for talent is no longer about being the best paymaster. Employees of today expect a range of customized perks and benefits, and these vary by region, generation, life-stage, personal and career aspirations, and so on. HR must be able to read these economic and personal indicators, and proactively predict the talent-expectations. They must work closely with business and build a talent strategy unique to each employee group, while aligning with the business goal.