Hiring a new employee is a great investment for the company everyone understands that quality most of the time matters more than quantity, and the quality in a talent pool is not easy to find. It requires handpicking one out of hundreds, sometimes even thousands to hire an employee or employees, there is even a whole study called “talent analytics” which helps to determine the causes of successful hiring using data. Hiring can be costly, let’s break down some of the costs to consider when you’re looking for your next investment.

  First, need to decide, whether it is an independent contractor or a long-term employee? If a long-term employee, then study which source of hiring is the best for your company. To understand the source of hiring, you will need to study and have data on previous “successful hires” this way you can save time and decide what is the best way to hire: referred; job boards; sourcing, or career fairs.

There are two stages of the costs: External recruiting costs and Internal recruiting costs

External recruiting costs include:
• Job sourcing
• Pre hire assessments
• Background checks, work eligibility, health check
• Recruitment process outsourcing
• Recruitment technology
• Job boards
• Contractors
• Marketing

Internal recruitment costs include:
• In house recruiting staff
• Full time internal recruiters
• Systems (ATS)
• Referral rewards

  After finding out how much it will cost per hire, we can look at how much you will spend in some major cities during hiring and outsourcing. Need to make sure there won’t be any “surprise” costs after hiring an employee. Let’s break down gross pay + withholdings + employers’ contributions of an employee in each of the major cities: Shanghai; Hong Kong; Singapore; London; Tokyo; New York.

There are two things to consider: is the employee local or someone who needs a work permit? Both cases have their different expenses, we will cover hiring a local employee as a foreign or local employer.

Shanghai. When hiring a Chinese employee from a foreign company, one needs to understand local tax laws, first thing to consider is an employer must submit contributions to the area’s corresponding tax bureau. Contributions in Shanghai made to Social Insurance (includes Pension, Unemployment, Medical, Injury), now employee’s Pension rate is 8%, and employer’s 16% of the monthly salary. For Medical insurance, while the employee’s rate is 2%, the company must contribute 10.5% of the employee’s gross salary. Injury insurance (in the workplace) is covered by the employer only, the rate is 0.25 % of the employee’s monthly salary. The unemployment tax rate is 0.5% for both parties. Housing funds also should be paid by both sides, and it is 7%.

Example: Monthly gross income is CNY 15,000 net pay will be CNY 11,925 after 20.5% tax. The employer in this case with all the taxes and social security payments ends up with +34,25%, CNY 20,137.

  The cost of recruitment agencies in Shanghai (local agencies) is from 21% – 28%.

Hong Kong. Notification by an employer of a new employee should be done through the IR56E form. This needs to be completed and returned to the Inland Revenue Department (IRD) within three months of commencing employment. Inland Revenue Department (IRD) is responsible for collecting taxes and duties. The employee must pay the annual taxes themselves, there are no income tax withholdings done by the employer. The Mandatory Provident Fund (MPF) employee and employer pay 5% of the employee’s gross pay. There is also Income Tax which is paid by employees. Salaries Tax payable is calculated at the progressive rate (2%-17%) on your net chargeable income or at a standard rate (15%) on your net income, whichever is lower:

1.(Net Chargeable Income = Total Income – Deductions-Allowances) *(2%-17%)

2.(Net Income = Total Income-Deductions) *15%

Example: Annual salary let’s say is around HKD 25,000, the net pay will be HKD 22,966 after 8.14% deduction, 5% is MPF tax, and 3,14% Income Tax. For employers, there is only MPF tax which is 5%.

  Hong Kong’s local recruitment agency fee is 10% of the successful placement of an employee into a new position.

New York City. In general, in the US the taxes are handled by IRS (Internal Revenue Service). Let’s talk about tax rates for local employees and an employer, New York State has one of the most burdensome taxes compared to let’s say Wyoming. There are New York state taxes vary from 4% up to 10,9%. Social Security Tax which is 6,2% (every 147,000 USD) must be paid by both parties （*if self-employed it is 12,4%). Medicare tax is 1.45% paid by both parties, additional Medicare tax is 0,9%, paid only by an employee. Federal income taxes vary according to the employee’s gross income from 10% up to 37% paid only by the employee, there is a retirement savings plan which is called 401(k) *that has contribution limits and can be around 2%-3% of the income of an employee and paid by both parties. FUTA (Federal Unemployment Tax Act) rate for the employer is 3,4%. SUTA (State Unemployment Tax Act *new employer rate) 4.1%. Reemployment tax is 0,075% paid only by the employer. The tax brackets also have different sectors: single; married; head of household.

Example: A local New Yorker gets hired and the monthly gross pay is USD 5300 (26.6% taxes) in the end employee’s net pay will be USD 3887. For the employer, while the Employee’s income is 5300 and there are several taxes plus insurance. On top to make the position more attractive most companies or employers also offer (health insurance benefits, dental insurance, paid holidays, and paid medical leave) benefits. In the end, the approximate number excluding benefits is + 25,1% is the cost on top new employee’s gross pay, which is USD 1,330, a total of USD 6630.

  The recruitment agency fee in NYC is around 15% – 20% of the annual salary of your new employee.

In Singapore, you will start with choosing the best option for you to find the next talent by referred; job boards; sourcing, or career fairs. If need to use a platform here are the most common job posting sites: Indeed/ Google for jobs/ Beamstart / Glints/ Startupjobs.Asia/ STJobs / Linkedin, all of which are free, but some have paid options. After finding your talent we can investigate how much it costs to hire a new employee. In Singapore the employer must take into consideration CPF contribution rates, CPF (Central Provident Fund) is a mandatory retirement savings scheme for Singapore Citizens and Permanent Residents, it is a compulsory comprehensive savings and pension plan for working Singaporeans and permanent residents. The rates vary, depending on the age of an employee, which is paid by both parties. Employees pay from their gross salary and employer must contribute their portion as well. Benefits and health insurance are not compulsory. Here you can learn more all about it: https://www.cpf.gov.sg/employer/employer-obligations/how-much-cpf-contributions-to-pay

Example: Singaporean or permanent resident gets hired by a foreign or local company, the employee is 35 years old this year, ordinary wage SGD 3350 and additional wage 0, in this case, employee’s contribution is 20% (SGD 670) and employer’s 17% (SGD 570), which leaves monthly net pay at SGD 2680. Can be calculated here:

https://www.cpf.gov.sg/eSvc/Web/Miscellaneous/ContributionCalculator/Index?isFirstAndSecondYear=0&isMember=1

  The second option is to use an outsourcing agency, average coverage is around 15% – 30% of a successful jobseeker’s annual salary.

Tokyo. Since Japan struggling with labor shortage finding a local talent is harder than in any other places, a lot of Japanese companies must attempt to attract any possible talent with many bonuses and paid leaves. So, when hiring a new employee there are several additional costs over the employees’ gross pay. Shakai Hoken is Social Security of Japan, and it covers things like health insurance, worker’s compensation, unemployment insurance, pension. Combined all social security amount for employers is 14.6% to 16.65% on top of employee’s pay. 

Example: Let’s say the gross income of a new employee is JPY 410,000, employer’s contribution is 14.6%. Employee’s rate is: income tax, health insurance, pension and unemployment insurance are 25.6%.

  Recruitment agency’s fee 30% – 35% in Japan.

In UK London hiring a new employee is quite costly, first, you need to make sure you have all the papers and are ready to hire a new employee, the tax authority in the UK is HMRC (Her Majesty’s Revenue and Customs) equivalent to IRS in the US. In the first year, the cost of a new employee might exceed the usual numbers. Mandatory costs for employers are National insurance Contribution of 13,8%; Pension Contribution of 3%; Bonuses of 6% *not mandatory, benefits, training, and office equipment depending on the position. There is also Holiday pay, which entitles workers to take 5,6 weeks of paid leave, at that time might need to hire contractors while the employee is away. Here is the most important information relating to employment:  https://www.gov.uk/employ-someone

Example: If monthly gross income is GBP 3,500, the employer adds 13.8%, and the employee must contribute 24.1% which is income tax and NIC.  Net pay is GBP 2,655. Total GBP 4892.

 The average in the UK recruitment agency fee is 20% – 30%.

In conclusion, here are the three main factors, gross pay, net pay, and total cost per hire for new employee.

Let’s talk about economics, to be more precise about recession. There are so many debates between economists:  what causes, how to prevent or recover from recession, but everyone agrees on that it is a cycle of healthy reaction of economic growth.

Recession:  “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales”. It also has different informal “shapes” V U W L Swoosh, each to characterise recessions and their recoveries.

But what does recession mean to us, on our day-to-day life?

Well, economic recession from previous experiences we can say that it affects employment the most, and then things like spending habits, manufacturing, and sales. It is most likely that a lot of people will lose their jobs and for some time won’t be able to find a new position, that is the most devastating effect. But again, it all depends on what kind of recession it is. Since 1929 “The Great Depression” which started with recession, since then there were dozens of economic recessions. The one, we must mention is 2007 – 2009 “Great Recession”, many believe it was due US “Subprime mortgage crisis” in 2005 and many other factors. This economic downfall felt differently worldwide while in developed countries particularly in North America, South America, and Europe, fell into a severe, sustained recession, many more recently developed economies suffered far less impact, particularly China, India and Indonesia, whose economies grew substantially during this period. Similarly, Oceania suffered minimal impact, in part due to its proximity to Asian markets. After 2008s recession another point is worth mentioning is peak of global growth in 2017.

The most recent recession, which is the result of pandemic and lockdowns around the world, governments demanding on closing/work from home/study online, and travel restrictions. But there is another reason which started in 2019 with economic slowdown, it might be from tension around the globe, like oil issues between Russia and Saudi Arabia, China US trade war, and of course Brexit.

  Covid – 19 pandemic recession, the effects in China and rest of Asia?

First wave of recession was end of February, global stock market noticed the worst drop since 2008. In China particularly outbreaks lead to lockdowns of cities businesses etc. which can be seen in declines in consumption and supply chain disruptions. Since the outbreak, the average two-year growth rate of China’s GDP in 2020 and 2021 is 5.1%, and the two-year average growth rates in each quarter are 5.0%, 5.5%, 4.9% and 5.2% respectively. In general, in the past two years, China’s economic slowdown has been mainly dragged down by final consumption expenditures, while external demand has played a positive role. The second largest economy in the world was the first hit by the pandemic, and many predicted it will weaken the half century striking growth of Chinese economy. But predictions were wrong, in first quarter China did see some decline, but is picked up speed in the fourth quarter, with growth, beating expectations. It was V shaped recession which started in the beginning of 2020, V shaped meaning it suffered a sharp but brief period of economic decline with a clearly defined trough, followed by a strong recovery.

 How other parts of Asia had reacted to the Covid-19 recession, and its consequences? (Singapore, Malaysia, Philippines, Thailand, Hong Kong)

Singapore – struggled the worst recession since its independence（1965）. While the whole world had their own issues in 2020, Singapore had to deal with: high demand and supply shortages, travel restrictions and implementation of Circuit Breaker from April to June of 2020. By the end of the year some sectors of economy recovered to pre pandemic levels or came close, but areas like travel and air passengers were still significantly low compared to 2019. In 2021 Singapore’s overall GDP overpassed the full-year growth to 7.2 per cent, on the higher side of the official full-year growth forecast of “around 7 per cent”. Locals are still under some restrictions, for example, last year November Multi – Ministry Taskforce have announced that people can have a gathering of 5, previously 2.

Malaysia – due to economic restrictions and lower global demand, the pandemic wave late in 2020 helped drive the economy to its worst annual showing since the Asian financial crisis (1997). The last seen declined of Malaysia’s economic was in 2009 (-1.5%), and the economy downturn of 5.6 per cent (2020) was the lowest after 1998 (-7.4%).  2022 Bank Negara Malaysia (BNM) on Friday (Feb 4) reiterated that the Malaysian economy will expand between 5.5% and 6.5% this year, underpinned by continued expansion in global demand and higher private-sector expenditure, said governor Tan Sri Nor Shamsiah Mohd Yunus.

Philippines – in 2021 struggled its fifth consecutive quarter, The latest GDP statistics for the first quarter of 2021 showed that the Philippines economy contracted by 4.2% year-on-year, the fifth consecutive quarter of recession. This follows a severe contraction in GDP in the 2020 calendar year, with the Philippines economy having contracted by 9.6% year-on-year. In 2021 Philippines expecting GDP growth to be in range of 5% to 6%, the full year growth settled at 5.6. This year the official forecast for 2022 GDP was pegged at 7-9% with growth expected to get a boost from national elections scheduled in May.

Thailand – Covid was especially tough on Thailand. Thailand’s GDP fell by 6.1 percent in 2020, the largest contraction since the Asian financial crisis. The tourism sector, which accounts for about a fifth of GDP and 20 percent of employment, has been especially affected by the cessation of tourist travel. It hit different on each socio-economic group.  In January this year, Thailand introduced new regulations affecting tourists and enterprises in the country: “including 26 provinces with “blue zone” pilot tourism destinations. And other areas, such as “orange area”, etc.”

Hong Kong – the recession started around 2019, Hong Kong’s Gross Domestic Product in 2019 contracted by 1.2% on-year, the first annual decline since 2009. In 2020 as in other countries around the world local businesses struggled the most from the new restrictions, and fear of the pandemic. But for the first half of 2021, economy grew by 7.8% over a year earlier. By the end of 2021 the economic growth was 6.4% which ended the recession. In 2022 Hong Kong expecting full recovery and growth of exported goods and local consumption level, trade reliant fields will also see benefits from China’s fast recovery from pandemic crisis.  Some of the fields still will have struggles, like international travel (restrictions will continue to weigh on tourism) and related retail and services sectors.

It’s the beginning of a new year, and this calls for new changes in Singapore’s employment scene. Particularly, the new year calls for a new way of work, as work from home in Singapore is no longer the default from 1 Jan 2022. Singaporeans, that means to say that it’s time to pack our bags and squeeze with the morning commute once more.  

As workers are shuffling back to offices and getting used to a forgotten routine, symptoms of burnout and exhaustion may surface. This is because the introduction of remote work has benefitted many in terms of higher flexibility and autonomy. Forcing a sudden change back to the pre-pandemic office life may require some time for readjustment. Thus, it remains imperative that employers tackle these challenges addressing employees’ mental wellbeing and take measures to create a supportive work environment for their employees.  

While most of us can agree that working in offices can ensure a certain level of productivity, employers should also understand that not all employees are ready and excited to be back in offices. Not just adding on to commute hours, meeting colleagues in person and navigating social anxiety could be a challenge for some. After all, there exist numerous personal struggles that every individual will face, and it is without a doubt that neglecting mental well-being is detrimental to productivity. 

Keeping an open channel and being equipped in holding the right conversations 

Hence, on the topic of keeping a supportive work environment for employees, one way that employers can approach hybrid work in the new year is to keep an open channel of communication. Ideally, employers should spend time to check in on employees and meet each employee where they are. However, a more macro level initiative could be investing in mental wellness initiatives to highlight the importance during these uncertain times. 

In Singapore, Senior Minister of State for Health – Janil Puthucheary – mentioned that the Health Promotion Board (HPB) has seen a rising demand for training programmes that surround the topic of equipping employers and human resource managers with skills and knowledge on how to identify symptoms of common mental health conditions among their work peers and employees. This can be a good place to begin, as navigating through mental health conversations can be tricky. With more than 7 out of 10 Singaporeans indicating that they are facing more struggles with their mental health in 2021 compared to the start of the pandemic, it is high time that employers be equipped with the necessary skills to hold the right conversations with struggling employees.  

Providing online resources 

Often, struggling individuals do not always find comfort in reaching out and speaking out about their private issues. Therefore, employers should also consider providing online resources where employees can tap on to get appropriate help. Some popular options adopted by Singaporean companies today are wellness webinars, paid counselling sessions with partner mental health organizations, chatbots, and even virtual meditation sessions that help employees relax. Such dedicated platforms can signify to employees that their mental well-being is being cared for, which is important in their transition back to the office.   

Structured team events 

The lack of face-to-face interaction coupled with Zoom fatigue can cause a bumpy return to pre-pandemic office life. Employers are also encouraged to facilitate this by holding structured activities that focus on letting employees catch up over a non-work-related activity. This can be as simple as a mandatory team lunch, or even just a meeting that let employees interact with one another to ease back into socializing beyond the screens. After all, reinforcing friendship as the working culture is proven by research to create higher engagement that will result in better work productivity.  

The bottom line is that creating a workplace culture of acceptance, respect and empathy is extremely crucial. Mental wellness has never been more relevant today, and progress in recognizing the importance of workplace well-being must be made. Employers hold great responsibility in nurturing the relationships with and amongst their employees, and such investments will definitely help organizations come out of this pandemic as a stronger employer brand and a loyal talent base. 

References: 

https://www.straitstimes.com/singapore/health/trust-is-key-to-getting-employees-to-talk-about-mental-health-concerns

https://www.straitstimes.com/singapore/health/singapore-companies-opening-up-to-giving-staff-more-mental-well-being-support

https://www.straitstimes.com/singapore/health/growing-focus-on-mental-health-at-workplace-as-covid-19-pandemic-takes-toll

https://www.forbes.com/sites/forbeshumanresourcescouncil/2021/06/29/five-ways-to-help-employees-manage-return-to-office-anxiety/?sh=7be96ce17c4e

The year draws to a close again; at this point, we have come so far in this pandemic, with various rules and regulations put in place and then subsequently lifted. More importantly, the way we work has been revolutionised, with drastic changes made to past ways of working. As offices shift back and forth between hybrid-working and work from home, the importance of the tools we use are incredibly understated, which is precisely what we are going to discuss in this article today. 

Fast Internet 

Everyone hates it when their YouTube video takes a little too long to buffer. Imagine how much worse it would be when a video call constantly gets interrupted, with the screen freezing or the voice breaking up, lagging in a way reminiscent of the dreadful moans of the damned. Or, to be the poor speaker rambling on for 5 minutes straight only to realise that nobody has caught what you just said because only parts of your speech made it through. Slow internet is frustrating for everyone in the call, and only serves to reduce work productivity.  

There are various solutions for ensuring fast internet, such as finding a decent spot in the house with good access to the router, or looking into wifi extenders (if you live in a relatively big house). It might even be time to think wired, by utilising LAN cables or a desktop computer with a wired connection instead of challenging fate with fluctuating strengths of wifi signals. 

Quality Set-up

We are talking about a decent camera, microphone and headphones. Perhaps even a laptop stand for those of us still working on our laptop, elevating the screen to face level such that we can have better posture. All these would serve to improve QOL in terms of “workspace”, adding an even more “legit” feel to whatever we are doing at work. 

Video-calling Subscriptions 

If for some reason your team is still working via “free” video-call services, then this article is a sign for you to quit cheaping out, and just buy that subscription already. Services like Skype, Hangouts and Zoom, while technically “free”, add several restrictions to the type of meetings that can be held. It is false economy to use these services; reducing costs should not come at the expense of severely limiting work efficiency and reducing the quality of calls needed for work to function. The paid version of the services is paid for a good reason, as they have the quality needed for business calls and are a prerequisite for connecting remote teams. 

Messaging Apps 

It is essential for asynchronous communication. It is also all too easy for groups on messaging apps to go out of hand, or have many disorganised channels of communication. Having someone specifically in charge of managing and updating the groups would smoothen communications out much better. Differences in communication styles also means that it is important to establish clear boundaries and guidelines in online workplace conversations. Ultimately, this is still a professional space, and having some form of moderation will prove to be beneficial for everyone. 

Cloud Storage 

Having documents stored in a central online space, accessible to everyone, is much more efficient than constantly emailing each other with file attachments, especially when multiple parties need to access the same files. Programs like Sharepoint, Google Drive and many others are essential for remote workers. 

Remote Whiteboards 

Cloud-based whiteboards can cater to the needs of remote teams or enterprise teams working across several locations and time zones, allowing collaborations across space and time via digital tools.  

Expenses Management System 

There needs to be a centralised and automated place to process invoices, and also approve and manage spending of remote teams.  
 

Overall, it is important to consider the tools we are using for remote working, that is certain. I would also like to attribute parts of the article to Anastasia Tohmé and Martin Worner, for without their book Work Remotely, this article could not have been written. Beyond the points brought up here, Work Remotely provided insights into what is needed for making the most out of working remotely, including advice such as managing communication and more. This is a must-read, especially during this precarious period. 

It’s that time of the year again, a time for celebration and joy. Even for those non-religious, the wave of cheers with Christmas and the upcoming New Years is perhaps one of the bright spots in this on-going pandemic. And at the end of 2021, it is also important to note the general changes to employment that have occurred throughout 2021, so that we enter the next year well-prepared. 

Taxes 

The Singapore government had announced a series of extensions for various tax schemes in Singapore, in lieu of the on-going pandemic and to provide better support for businesses. Schemes such as the option to accelerate the write-off of the cost of acquiring plant and machinery (“P&M”), the carry-back relief scheme (with 2021 included in the year of assessment too), the Not-for-Profit Organisation (“NPO”) tax incentive (extended until December 2027) have all been extended, with many other changes too. Businesses should visit the IRAS website to find out more. 

Retrenchment Policies 

Coming into effect November 2021 onwards, employers in firms with more than 10 employees are required to notify the Ministry of Manpower (MoM) if any employee is retrenched. Previously, employers were only required to do so if five or more employees are entrenched within a six-month period (a retrenchment exercise). 

The employer would be given five days to notify MoM via an online platform from the day in which the notice for retrenchment is given to the employee. Employers are to pay all salaries, including unused annual leave, notice pay, etc., to their employees on their last day of work.  

This is part of COVID-19 support measures pushed out by the government, such that the government and relevant offices would be able to step in to assist the affected employee to provide employment and job search support.  

Retirement & Re-employment Age Adjustments  

The retirement and re-employment age for Singapore workers will be progressively raised to 65 and 70 respectively, up from 62 and 67 currently. This process will start from 1st July 2022, with the retirement age being raised to 63 and the re-employment age to 68. In accordance, CPF contribution rate for senior workers aged above 55 to 70 years old will also be increased by 2% starting from 1st January 2022. 

Work Permit Renewal Limits for Foreign Worker & Rebates 

For those working in the construction, marine shipyard and process (CMP) sectors will have limits placed on the renewal of their permits temporarily lifted in order to ease the labour crunch this sector is currently going through. CMP workers whose work permits expire between July and December 2021 can renew their permits for up to two years, even if they do not meet the renewal criteria such as the caps on employment period or employment age. 

Levy rebates on foreign workers (250 SGD per worker) have also been extended until March in order to help labour-intensive companies, especially those of the above sector. 

Fair Employment Guidelines to be Formally Legislated 

 Tripartite Alliance for Fair and Progressive Employment Practices (Tafep) is a three-way partnership between the Singapore government, the National Trades Union Congress (NTUC) and the Singapore National Employers Federation to provide fair employment guidelines. Although Singapore-based companies are already required to follow Tafep guidelines, enshrining it into law would give even more protection for the workers and allow the authorities more room to intervene. 

Overall, this has been a series of changes that signals Singapore to be moving towards a more progressive direction, with greater protection and coverage for workers. However, the on-going pandemic still introduces complications such as the limit of number of people in office as well as vaccination statuses affecting employment, as these conditions constantly fluctuate in such volatile times. 

References: 

https://www.businesstimes.com.sg/government-economy/singapore-to-temporarily-relax-foreign-worker-hiring-rules-mom

https://www.mom.gov.sg/employment-practices/retrenchment/responsible-retrenchment

https://www.straitstimes.com/singapore/politics/retirement-and-re-employment-ages-will-be-raised-to-65-and-70

https://www.straitstimes.com/politics/national-day-rally-2019-retirement-age-to-go-up-to-65-older-workers-cpf-rates-to-be-raised

https://economictimes.indiatimes.com/nri/work/singapore-extends-levy-rebate-on-foreign-workers-till-march-to-help-15000-labour-intensive-companies/articleshow/88409252.cms

https://www.straitstimes.com/singapore/politics/ndr-2021-fair-employment-guidelines-to-become-law-new-tribunal-to-deal-with