Future of jobs market seems bleak
In trade-dependent Asia where many countries are seeing contractions in their manufacturing sector due to falling demand from abroad, the future of the jobs market seems bleak.
With the United States facing its worst jobs loss since 1974 and millions in China’s manufacturing sector out of work, the fear is that a prolonged downturn might begin to spill over into the services sector, which has become a major source of employment for a number of emerging economies.
According to economists, this is because private consumption, which has held up well in the second-half of last year (at least in Malaysia), might decline if more people are out of work in a prolonged slump. They are expected to use less services, which in turn would affect the services sector.
The situation is already happening in the US, where a total 1.8 million jobs were lost in the last three months. It is also happening in Europe.
A quick look through the classifieds of the local dailies would give some idea of how certain industries are faring.
While companies prefer not to hire, opting to conserve cash during the downturn, the education and healthcare industries are still hiring people as are companies in the oil and gas industry despite the contraction in the mining sector over the past quarters.
According to Manpower Staffing Services (M) Sdn Bhd country manager Sam Haggag, the demand for people with specialised skill sets especially in industries such as oil and gas is still there.
He told StarBiz that the shortage of talent in the industry was an ongoing problem. “It is pretty chronic and the demand for energy will not go away in the future,” Haggag said.
He said even in a recession, demand for goods and services that were deemed as luxury items might not drop much because people in upper income brackets may not feel the impact as much.
Haggag said that might explain the recruitment ads from the leisure and hospitality industry.
He said manufacturing jobs would still continue to be reduced over the next one to two quarters but a silver lining might be the offshoring of jobs from North America and Europe to countries with cheaper labour costs.
“For Malaysia, there may be an increase in shared services and business process outsourcing positions,” Haggag added.
Nevertheless, he said even in areas where consumer confidence and hence spending was going to be relatively high, there might be some adjustments.
But for some, the impact from a slower jobs market is already being felt.
A regional consultant with a recruitment firm from California said business for the company, which has an office here, had slowed.
“As far as I can see, companies are now concentrating on retaining talent and training,” she said.
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