As surprising as it may sound, the most populated region on the planet is facing an imminent labour shortage. According to the International Monetary Fund’s (IMF) 2023 World Economic Outlook, Asia Pacific (APAC) is currently experiencing a shortfall of more than 12 million workers. The situation is likely to get worse, with the talent gap growing to 47 million—equivalent to the entire population of South Korea—by 20301.
The timing of this labour shortage is particularly challenging. In the next year, APAC is predicted to lead the world in terms of GDP growth2, which could further exacerbate the existing skills shortage. In search of solutions, businesses in the region, from tech hubs in India to financial centres in Asia, are turning to immigration to secure the talent, skills, and innovation necessary for growth. For example, certain businesses are making efforts to leverage government programmes such as Singapore’s ONE Pass which is intended to attract top talents in business, arts, and culture, to work in Singapore. Other organizations are also making use of Hong Kong’s Top Talent Pass Scheme which seeks to encourage individuals with rich work experience and good academic qualifications from all over the world, to explore employment opportunities in the city.
Immigration is not a new concept for countries struggling with tightening talent markets. Indeed, the intrinsic challenges, such as security risks, economic disparities, and the long-term impact on cultural identity, are making the jobs of APAC leaders harder than ever. The demand for greater talent mobility is forcing leaders to rethink and reform their regulatory architectures.
For example, following a 2023 review of its migration system, Australia’s government has updated its strategic objectives and roadmap3. The country is determined to target skilled migrants more precisely, including by introducing a new points system for permanent skilled worker visas. The migration review also recommended the adoption of a risk-based approach to temporary labour migration with three broad tiers. The ease of application and level of regulatory effort varies inversely from tier to tier.
Tier 1 targets highly skilled and highly paid talent, and the documentation is therefore correspondingly superficial. Tier 2 focuses on mid-level employees. Tier 3, arguably the most taxing for HR and mobility teams, covers lower paid employees with skills in persistent demand in a variety of sectors. Since this cohort is also at the highest risk of exploitation, as well as potentially displacing Australian citizens with similar skills, Tier 3 visas are expected to be the most document-intensive.
Further north, historically homogeneous Japan is tackling a marked demographic decline and attendant labour shortages by adopting incremental immigration reforms. The government is actively promoting the acceptance of foreign workers in specialized and technical fields in an effort to revitalize Japan’s economy and society4.
That doesn’t mean Japan has thrown its doors wide open; there is still the need for a more streamlined process for professionals, including clearer visa regulations and a reduced administrative burden.
Japanese authorities are also taking a cautious approach to admitting foreign workers in non-specialized fields, and carefully considering the impact on the economy and society of various factors, including labour conditions, social costs, and industry structure. However, the idea is gaining traction and is firmly supported by Prime Minister Kishida Fumio, who has stated “We have to consider a society where we coexist with foreigners5.”
Singapore has plenty of experience when it comes to managing migration. The island nation has transformed its workforce from almost wholly Singaporean (96.8%) in the 1970s, to filling talent gaps with highly skilled migrants in the 1990s onward. In fact, in recent decades, economic growth has largely been driven by the expansion of the highly skilled workforce, both local and foreign6.
Although foreign manpower still supplements the resident workforce and contributes to overall economic competitiveness7, in recent years, the Ministry of Manpower has tightened requirements for Employment Passes, S Passes, and Work Permits, and has imposed quotas and levies on the latter two. With the rebound in foreign workforce numbers post COVID-19 pandemic era, the Singaporean government has also introduced a points-based framework for Employment Passes6.
This constantly changing landscape is making things more challenging for HR and mobility professionals tasked with navigating an ocean of immigration paradoxes. Issues that HR and mobility professionals typically need to address include:
Although it is essential to business growth in many countries, immigration can present a complex web of regulatory, economic, and societal impacts. Corporate mobility programs are no longer only about procuring talent and venturing into new markets but can also be about enriching company culture, driving local upskilling and workforce transformation, and enabling harmony and diversity to fuel economic growth.
These additional benefits may bring extra responsibilities for corporate HR teams. Embracing broader perspectives and adopting a “triple win” approach (i.e., employee/company/host country) are key steps to be taken that can address regulations holistically. Leveraging qualitative and quantitative data can also make a great contribution to shaping a global workforce. In other words, instead of looking for a one-size-fits-all solution, businesses should approach mobility programs with both a wide lens and a microscope.
The question that may be on the minds of many HR professionals is how to put it into practice.
Good management starts with good measurement. A first step is to analyse the workforce, which would include focusing on direct and current data within the employee population (e.g., age, occupation, skills, and approved earnings), which can help expedite decision-making. Over time, a workforce analysis can yield a standard list of core data points that cover evolving enterprise needs and regulatory requirements in different countries.
Mobility policies and processes can also be evaluated and, if necessary, aligned with talent and development and immigration objectives. An annual talent and immigration review of key markets, and due diligence on new market entry challenges, can also pay solid long-term dividends.
Once a program is implemented, engagement with all relevant stakeholders is critical to keep it running smoothly. That means proactively interacting with business leaders and C-suite executives, and keeping employee population groups informed of updates as they are released.
The immigration journey is ever evolving. Constantly changing business and regulatory environments call for effective future planning, combined with innovation when updating mobility and recruitment strategy. Together they open the door to take advantage of changes in immigration policy directives, new people opportunities, and/or potential cost savings.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or the following team:
Yang Li
Partner, Asia Pacific Immigration Lead, Vialto Partners
Cherie Wright
Partner, Vialto Partners
Stacey Tsui
Partner and Principal Solicitor, Vialto Partners
Irin Ou
Director, Vialto Partners
Jia Ee
Director, Vialto Partners
Please reach out if you’d like to learn more about Vialto.