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  • Singapore Workforce Trends 2026: Job Hugging, Emotional Salaries and the Death of 9-to-5

    Singapore Workforce Trends 2026: Job Hugging, Emotional Salaries and the Death of 9-to-5

    Recent data from the international payroll and HR platform, Deel, has highlighted five emerging trends that are set to significantly influence Singapore’s work culture and employee decision-making processes by 2026. These findings present a significant shift in the current landscape, challenging employers to rethink strategies surrounding talent retention, workspace design, and compensation.

    Decrease in Job Switching

    Singapore’s workforce has recently observed a notable decline in the frequency of job switching. This rising preference for maintaining a steady career, termed “job hugging,” is not fueled by employee loyalty but rather by a careful approach to career stability. Given the current state of economic unpredictability, workers are beginning to prioritize job security over swift career progression.

    Increasing Importance of Emotional Salary

    With the growing strain on standard pay packages due to inflation and budget constraints, employers are starting to focus on “emotional salary” to attract and retain talent. This concept encompasses various aspects such as recognition, flexibility, autonomy, purpose, and opportunities for personal development. Statistics highlight this trend, showing that only 13% of employees believe their salary has maintained pace with inflation, while 79% desire more flexible payment schedules, and 54% seek greater control over their compensation structure. This data indicates a workforce that values emotional and financial well-being as much as monetary compensation.

    Adoption of Microshifting

    Traditional 9-to-5 workdays are evolving into a more adaptable model through the concept of “microshifting.” This model allows employees to segment their workday into shorter, concentrated periods of work that align with their energy levels and personal needs, ranging from rest to exercise to caregiving. The outcome is a more flexible, productivity-centered work rhythm.

    Shift Towards Conscious Unbossing

    “Conscious unbossing” is a new trend where employees, particularly Gen Z, are consciously moving away from managerial roles to prioritize balance, autonomy, and wellness. This gradual shift is leading employers to reconsider their leadership succession plans as fewer employees express interest in climbing the corporate ladder.

    Rising Career Pressures

    The surge of polished success narratives on professional networks is amplifying what is known as “LinkedIn envy,” a phenomenon where employees grapple with feelings of inadequacy by constantly comparing themselves to others. As career achievements become more public, the emotional pressure escalates, reminding employers of the increasing correlation between psychological well-being and career contentment.

    Forecast for Singapore’s Talent Landscape in 2026

    These emerging trends suggest that employees are reshaping their definition of success and adjusting their expectations of employers. Organizations can seize this opportunity by accommodating these changing priorities through enhancing emotional and financial support, modernizing payroll systems, and overhauling the employee experience from its very foundation.

    Karen Ng, the Regional Head of Expansion, Enterprise, North and South Asia at Deel, explains, “In Singapore, the traditional career path is undergoing a transformation process as employees navigate not only economic turbulence but also evolving personal priorities. The trend of employees ‘hugging’ their current roles due to a yearning for stability is on the rise. When employees feel financially stable and emotionally supported, they are not only more likely to stay but also more likely to positively contribute to organizational growth.”

    Questions & Answers

    What is “job hugging”?
    Job hugging refers to the trend of employees opting to remain in their current roles rather than seeking new opportunities. This trend is driven by a desire for stability and predictability in uncertain economic times.

    What is “emotional salary”?
    Emotional salary refers to non-monetary benefits used to attract and retain talent. This can include recognition, autonomy, purpose, flexibility, and personal development opportunities.

    What is “conscious unbossing”?
    Conscious unbossing is a trend where employees, particularly from Gen Z, are intentionally stepping away from management tracks in pursuit of balance, autonomy, and well-being.

  • Vietnam labor export firms expand to new markets

    Vietnam labor export firms expand to new markets

    Labor export companies are shifting their focus to new markets such as Poland and Australia to find job opportunities for workers.Eastern Sea Labor Export, Services, and Trade (Estrala) in HCMC has been partnering with businesses in Poland and Germany in the last several months to connect them with Vietnamese laborers.

    The company is in the process of sending 100 workers to Poland with an average monthly income of US$1,000, including insurances.

    They will work in the fruits and food packaging industry. Healthy individuals who are in the age of 20-50 with a high school diploma are eligible.

    Workers get weekends off and provision of accommodation, transportation, and meals. They have the option to extend their contracts after two years.

    Estrala offers free English language training and assist workers in acquiring low-interest bank loans.

    It is also transporting workers to Germany for short- and long-term contracts in the food industry.

    “We are expanding to new markets to offer more choices for workers and reduce our dependency a single market,” said Nguyen The Dai, deputy CEO of the company.

    While Estrala has been sending workers to Japan for years, recently it has been facing challenges in this market due to the decline of the yen and increasing competition with other labor exporters.

    Dai said that Europe has a strong demand for labor and countries in the continent offer competitive salaries with robust welfare benefits.

    Germany is an attractive destination for Vietnamese workers as the food packaging industry offers a monthly base salary of EUR2,700 (US$2,761).

    Workers can even bring their spouse and children to the country where they can enjoy free healthcare and education along with an opportunity for long-term residency.

    Another new labor market is Australia, where the Vietnamese government has selected six companies to implement a labor export program in the agriculture sector.

    “This is an opportunity for Vietnamese workers in a new market,” said Nguyen Duc Nam, chairman of the International Manpower Supply and Trading Jsc (Sona), one of the six selected firms.

    The company was approved by Australian authorities thanks to its capabilities, extensive experience in agricultural labor markets, recruitment strategies, overseas worker management plans, and a commitment to not charging service fees to workers.

    Nam said that the Department of Overseas Labor is developing standard contract templates for companies to negotiate with Australian partners, and Sona is studying Vietnamese workers’ demand to build a strong supply for this market.

    Starting this year, Australia will accept around 1,000 Vietnamese workers annually, with basic monthly salaries ranging from AUD3,200 to 4,000 (US$1,960-2,450), before living expenses are deducted.

    Pham Viet Huong, deputy head of the Department of Overseas Labor, said that alongside traditional markets such as Taiwan, Japan, and South Korea, Vietnam is actively expanding into new markets.

    Labor cooperation has been a key agenda item in high-level meetings. Vietnam has already signed agreements – or is in the process of doing so – with countries like Germany, Greece, Finland, Poland and several Nordic nations, he said.

    Other potential markets are France, Denmark, and Spain, where Vietnamese companies are actively seeking partnerships before government-level agreements are achieved, he added.

    Over 650,000 Vietnamese workers are employed in more than 40 countries and territories, sending home an estimated US$3.5-4 billion in remittances annually, official data show.

    Taiwan, Japan, and South Korea remain the top three destinations, with Japan leading for five consecutive years in terms of Vietnamese worker intake.

    South Korea offers the highest earnings, with monthly salaries ranging from US$1,600 to 2,000, followed by Japan (US$1,200-1,500) and Taiwan (US$800-1,200), according to the 2023 Vietnam Migration Profile, released by the Ministry of Foreign Affairs’ Consular Department in late October last year.

    Some European countries offer similar income levels.

    Middle Eastern countries and Malaysia report lower wages: around US$600-1,000 for skilled workers and US$400-600 per month for unskilled workers.

  • Canada probes Ralph Lauren on alleged use of forced labor in China

    Canada probes Ralph Lauren on alleged use of forced labor in China

    Canada’s corporate ethics watchdog said on Tuesday it was investigating Ralph Lauren’s Canada unit to probe allegations the apparel retailer’s supply chain and operations in China used or benefited from the use of Uyghur forced labor.

    The Canadian Ombudsperson for Responsible Enterprise (CORE) said it had published an initial assessment report after complaints filed by a coalition of 28 civil society organizations in June 2022 against the Polo shirts maker.

    CORE said the report published detailed allegations the company had supply relationships with Chinese companies that use or benefit from the use of Uyghur forced labor.

    The watchdog said it was also looking into similar allegations for Canada-based mining and property investment firm GobiMin.

    Ralph Lauren and GobiMin did not immediately respond to Reuters’ requests for comment.

    A similar investigation was launched by CORE into Nike Canada and Dynasty Gold in July over allegations they have or had supply chains or operations in China identified as using or benefiting from the use of Uyghur forced labor.

    In the last couple of years, several large US and Canadian multinational companies have been accused of using Uyghur forced labor either directly or in their supply chains.

    CORE monitors and investigates human rights abuses mainly by Canadian garment, mining and oil and gas companies operating abroad.

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  • IT talents sought after amid frozen labor market

    IT talents sought after amid frozen labor market

    Amid a season of low recruitment demand due to economic challenges, companies are still headhunting for experienced and high-skilled IT staff to speed up their digital transformation.

    Although many companies are scaling down their payroll, demand for IT experts remains high with the most popular recruitment positions being business administration, software development, cybersecurity, artificial intelligence, digital platform development and data analysis.

    Quang Trung Software City, a hub for IT businesses, has seen several companies such as Larion, TMA, Rakus, and SPS recruiting staff in recent weeks.

    An experienced manager at a business there said that companies were overpaying staff to ensure positions were filled even though it was not ideal.

    The gross income of programmers with more than three years of experience in Vietnam ranges from $2,100 to $6,000 per month, according to a survey by recruitment company IT TopDev last year.

    Recruiters say that the price range is the same this year as staff shortages remain.

    Companies expect IT experts to have design and analysis skills, along with team management and expertise in a particular sector such as finance or e-commerce. They are also required to have good communication and language skills.

    Truong Thien Kiem, a deputy director at recruitment firm Adecco Vietnam, said that the decline in orders this year had urged factories to increase automation and therefore hike their needs for high-skilled IT staff.

    Domestic companies must race with foreign enterprises who are also looking for the best IT experts.

    Thailand’s Kasikorn Business-Technology Group (KBTG) last month opened its Vietnam unit in Ho Chi Minh City, its third in Asia, to attract IT talent.

    The group plans to recruit 200 developers this year and will be partnering with universities to find suitable candidates.

    In May, representatives of seven Japanese companies in Hanoi showed up at a job fair at Hanoi University of Science and Technology to find graduate IT candidates.

    Recruitment demand is forecast to be high as Vietnam is estimated to need 600,000 developers this year and 800,000 next year, but the shortage could be between 175,000 and 195,000, according to TopDev.

    This is because only 35% of the 57,000 annual IT graduates meet business demand, it said, adding that beginners in the industry outnumbered seniors.

     

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  • Australia, Germany replace Japan as Vietnamese’s labor hot spot

    Australia, Germany replace Japan as Vietnamese’s labor hot spot

    Tu worked in Japan for two years but left when the devaluing yen lowered the value of his savings, which he intended to use back home in Vietnam

    He eventually set his eyes on Germany.

    The reasons were quite simple: Germany was experiencing a lack of labor resources and was employing measures to attract more foreign workers, including more open visa policies and attractive salaries.

    As Germany’s labor minister Hubertus Heil said earlier this year, the country would lack around 7 million workers by 2035 “if we don’t do something.”

    So Tu was there ready to answer the call. “This time I want to challenge myself in Europe,” he said.

    The 30-year-old man was one of many Vietnamese workers who left Japan after finding their earnings there not attractive anymore. It was essentially a double consequence of the dropping value of the yen and rising inflation.

    Inflation in Japan hit a 40-year-high last October, and consequently, the price of everything from fuel to food rose, and many people could not afford essentials in their daily lives, reported Reuters.

    But rarely are workers who’ve returned home from Japan satisfied with their earnings in Vietnam either. Instead, they are now often opting to relocate to Europe or Australia, which are both taking bold government steps to compensate for their lack of workers

    Tu didn’t allow any delays in his plan. He started learning German as soon as he returned to Vietnam from Japan.

    He spent around eight hours a day studying the language and managed to acquire a German B1 certificate, then a German training visa, which allowed him to enroll in a three-year vocational training course in the country, as well as be eligible to stay for another two years after his course completion.

    He relocated and became one among about 1.25 million foreigners with such a visa in Germany, according to data provided by the German Federal Statistical Office.

    According to him, the agency he hired to assist him in his visa application procedure told him that they had assisted 100 Vietnamese people relocate to Germany this year, an increase from only around 20 last year.

    After working in Germany for a while, Tu said that it wasn’t only the financial earnings, but also the benefits offered to migrant workers that are more attractive in Germany compared to Japan.

    “I had to work between 11 and 12 hours a day when I was in Japan, compared to only eight hours a day, five days a week here,” he explained, adding that he could arrange his schedule and work in other restaurants during his days off to make extra money.

    Similar to Germany, Australia is a destination that many Vietnamese workers are interested in. Businesses in Australia are receiving hundreds of applications from Vietnam and other Asian countries a day.

    Duy Nam, a manager at a meat processing company in the Australian town of Broome, said he received hundreds of emails and text messages a day asking about the Australian visa application procedure. His own younger brother was contemplating immigrating to Australia as a migrant worker as well.

    He attributed the growing popularity of Australia among Vietnamese workers to the shortage of domestic workers, which was partly caused by the country’s lockdown during the peak of the pandemic.

    Now that the pandemic is under control, the Australian government is doing its best to attract foreign workers. It now grants the subclass 462 visa (also known as the Work and Holiday visa), which allows its holders to work during their stay in Australia, to up to 1,500 people a year. And the visa application procedure has shortened from a year to a couple of months or even weeks.

    Lightening immigration policies is not the only recent boon for migrant workers in Australia. Workers’ average hourly rate in Australia was A$27 (around $19) before the lockdown, but rose to A$55 during the peak of the pandemic. Because of that, earning an attractive income of as much as A$10,000 a month became possible for Vietnamese migrant workers.

    Compared to that, Vietnamese workers in Japan can only save “between VND12-16 million (around $507-$677) a month, compared to VND20-25 million before,” said Tien Thanh, 24, initially planned to migrate to Japan and work as an electrical appliances technician, but was discouraged by his friends.

    He then changed his mind and moved to Australia, which took him six months and four failed attempts to finally do.

    After reaching the country, he started looking for jobs with the help of social media, and was offered work on a farm in northern Australia a week after arriving in the country.

    “There are a total of around 200 people working in my farm, of which as many as 47 are Vietnamese.”

    Thanh is satisfied with his current monthly income in Australia. He earned the equivalent of VND24 million his first month, but after getting more familiar with the work, now he can earn more and save around VND70 million a month.

    Based on his calculations, he’ll be able to pay back the VND300 million his family borrowed to help send him to Australia, in half a year, and then save enough money to get his own house in Vietnam after three years.

    As attractive as the idea of working in Australia and European countries is, both Tu and Thanh warned those who are interested in it about the risk of being scammed.

    “I know this guy from Ha Tinh province who sold his house for $30,000 to pay an agent,” Thanh said. “Only after arriving here did he know he had only obtained a travel visa, and was not eligible to work.”

    Tu added that the German visa application procedure consists of many phases and requires a lot of documents, so applicants should be cautious if agencies they work with treat it lightly.

    “There are agencies that send people to remote areas without helping them find jobs, so you should be careful,” he said.

    Still, those who managed to leave Japan and come to countries that offer more competitive rewards seem optimistic about their future.

    “Even if I don’t get a permanent residence, I can still come back to Vietnam and work well with the experience and knowledge I gained here [in Germany],” Tu said.

  • Labor market to record 150,000 new jobs in Q2

    Labor market to record 150,000 new jobs in Q2

    About 150,000 new jobs will be created in the second quarter of this year, including 28,200 in electronics and optical device manufacturing, according to the Ministry of Labor, Invalids and Social Affairs.

    The ministry forecast the most sought jobs will be related to manual works in the industrial sector, sales and marketing, accounting and finance, production management, personnel management, and project management.

    The most in-demand jobs will be relevant to software development; network administration; network security; data analysis and communications; accounting and finance; marketing, sales, and product management; health care; as well as mechanics, electronics, and automation.

    However, the ministry also pointed out that the labor market is facing numerous challenges in Q2, which will lead to the loss of 38,100 jobs in the garment industry, 38,000 in furniture production, and 37,800 in record printing and copying.

    Data from the General Statistics Office show that nearly 294,000 workers suffered from lay-offs or furloughs due to businesses’ shortages of orders in Q1.

    Experts held that it is necessary to take actions in response to the order decline facing many companies in such major industrial hubs as Dong Nai, Binh Duong, Bac Ninh, and Bac Giang.

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  • 35 pct of businesses lay off workers due to pandemic

    35 pct of businesses lay off workers due to pandemic

    Thirty-five percent of businesses had to let staff go after being hit by the effects of the Covid-19 pandemic, which disrupted supply chains, a survey has found.

    The dwindling number of workers was one of the four major difficulties businesses faced during the pandemic, the others being difficulties in approaching customers and disruptions in cash flows and supply chains, the survey, done by the Vietnam Chamber of Commerce and Industry (VCCI) and the World Bank, said.

    Textile and garment was the sector with the highest number of companies reporting negative impacts (97 percent), followed by information and communications (96 percent) and electrical equipment (94 percent), the survey, which polled nearly 10,200 businesses, said.

    Overall, 87 percent of companies reported negative impacts.

    Small and micro businesses established less than three years ago were most affected by the Covid-19 pandemic, Dau Anh Tuan, head of the VCCI’s legal department, said.

    But the government’s support policies were helpful, 70 percent of respondents said.

    Businesses called for more long-term solutions such as increasing public investment, completing ongoing infrastructure works, and providing stimulus packages.

    The VCCI has called on the government to provide financial support to companies that maintain a high employment rate and subsidize the cost of training to improve workers’ skills.

    Vietnamese businesses should take the opportunities thrown up by the pandemic as major Japanese, U.S., E.U., and Australian companies are looking to shift their supply chains out of China, it added.

    The VCCI also did a survey of 1,564 foreign companies in Vietnam and found 87.9 percent were affected by the pandemic and 22 percent had to lay off workers.

  • Vietnam child labor rate lower than regional average

    Vietnam child labor rate lower than regional average

    Vietnam’s rate of child labor, 5.3 percent, is around 2 percentage points lower than the average in Asia and the Pacific, a study has found.

    This equates to more than one million children in the ages of 5-17 engaged in labor, the survey was done in 2018 by the Ministry of Labor, Invalids and Social Affairs, the General Statistics Office, and the International Labour Organization and released recently, said.

    They undertake work that is prohibited because of their age, the number of working hours or the nature of the tasks involved.

    In line with global trends, 84 percent of child laborers in Vietnam are in rural areas, over half working in agriculture, forestry or fisheries.

    Other sectors where child labor is prevalent include services, industry, and construction. More than 40 percent are unpaid.

    “Child labor tends to take place in informal household enterprises down the manufacturing and production supply chains, which makes it difficult to detect,” ILO Vietnam director Chang Hee Lee said.

    The survey estimates that nearly 520,000 children in Vietnam are engaged in hazardous work or work which poses significant risks to a child’s health, safety or morals. Many of them work in industry and construction.

    The number of hours children in hazardous jobs work tends to be high, with 40.6 percent working over 40 hours a week.
    Only half of child laborers attend school, compared to the national average of 94.4 percent.

    Efforts must be speeded up immediately to end child labor in all its forms, the ILO said.

  • AirAsia joins hands with Workday

    AirAsia joins hands with Workday

    Two prominent outfits decide to join forces to stand out in the global market _ AirAsia has selected Workday Human Capital Management (HCM) as the partner of its digital transformation journey.

    AirAsia is a top-tier low-cost airline. The Kuala Lumpur-based company, which operates flights to more than 140 destinations spanning 22 markets, has tried to transform all of its business areas for improved efficiency and faster growth.

    As a part of its efforts, Malaysia’s biggest airline has rolled out Workday’s cloud technology for HCM to its 22,000 employees across the world. Workday is a leader in enterprise cloud applications for finance and human resources.

    Workday said that its HCM enables customers to uncover workforce insights for quicker and more informed decisions in optimizing human resources and talent management operations.

    “AirAsia’s digital transformation encompasses our people and culture as much as it does our business model. In doing so, we have looked closely at each stage of our Allstars’ career to see how best to leverage technology and use data,” said Varun Bhatia, chief people and culture officer of AirAsia.

    “Workday met our criteria for an enterprise-level, integrated, and cloud-based mobile HCM platform with strong reporting and analytics. We also appreciate Workday’s active and responsive partnership, along with strong customer support.”

    Workday Asia President Rob Wells also expressed his high hopes for the collaboration.

    “We are proud to be a partner to AirAsia, one of the most people-centric airlines in the world and a company that shares our vision of digital innovation and empowering people,” Wells said.

    “We will be working closely with AirAsia in its journey to transform its employee experience and maintain its position as one of Asia’s largest and leading low-cost airlines.”

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  • Subway under investigation for underpaying work force

    Subway under investigation for underpaying work force

    Subway has said it could terminate franchisees that fail to meet their financial responsibilities amid an investigation launched by the Fair Work Ombudsman into the underpayment of its workers.

    The sandwich retailer said franchisees are required to meet regulatory, financial, workplace and employment requirements, and failure to do so could lead to disciplinary action.

    “Failing in their commitment to uphold these will result in enforcement action and continued non-compliance may lead to termination,” a Subway spokesperson said, which reported the underpayment investigation on Monday.

    “All Subway restaurant employees are entitled to payment for hours worked, including for training. Any employee who believes they have been paid incorrectly by a franchise owner is encouraged to report this to Subway for investigation, through a dedicated employee hotline.”

    Local newspapers spoke to several Subway employees, who had seen thousands of dollars paid incorrectly over the years, as well as mentioning a general laissez-faire attitude adopted by the Subway head office.

    “The only things Subway head office care about is your name badge, your uniform, it is all about the image,” one employee said.

    A Subway spokesperson said these statements have not been reported to it, and that it takes matters such as these very seriously.

    “More than 10,000 employees are hired by franchise operators and work at the 1353 individually-owned Subway restaurants across Australia,” the spokesperson said.

    “While restaurant employees are hired by franchise owners, any concerns raised by employees are investigated by Subway immediately.”

    Subway is not the only retailer grappling with underpayment issues. Wage theft has been uncovered at Michael Hill, Domino’s, Super Retail Group and Chatime over the past year, though most said it was a result of the complexity of modern awards.

    However, an informal poll revealed almost 60 percent of more than 200 respondents believe underpayment is mostly intentional, due to businesses trying to cut costs.

    A recent report by the Australian Payroll Association found that almost a third of payroll managers admitted to making employee payment or entitlement mistakes at least once a month, and claimed that the larger the business, the more likely mistakes are to occur.

    However, the report claimed only 16 percent of businesses with fewer than 50 staff said they made such mistakes each month – a position most franchisees likely fall into.

  • Officeworks staff vote for Increased Salaries

    Officeworks staff vote for Increased Salaries

    Officeworks staff have approved a new Store Operations Agreement that will introduce higher base pay and penalty rates and new leave entitlements for eligible team members.

    More than 80 percent of staff participated in the vote, which closed on Sunday night, with 97 percent voting in favor of the new Agreement, according to a release from Officeworks.

    “The new Agreement sees over-award terms and conditions retained, with improved conditions for both part-time and casual team members when it comes to securing work,” the Wesfarmers-owned retailer said in the release.

    As part of the four-year agreement, eligible team members will receive a 2 percent wage increase for the first two years and a 3 percent wage increase for the last two years, with the base pay rate continuing to clock in above the award. They will also be paid higher penalty rates on weekends and evenings.

    Team members will also be able to choose their superannuation fund, and they will be provided with two days of paid domestic and family violence leave.

    Officeworks’ new leave entitlements follow the introduction of its ‘Growing Families’ policy in March, which saw primary carers receive 12 weeks of paid leave, double the amount they received previously, and secondary carers receive two weeks of paid leave, where none was available before.

    It also entitles primary carers to 52 weeks of superannuation contributions and long-service-leave accrual, and secondary carers to two weeks of superannuation contributions.

    “Providing certainty about pay and conditions for our team members so that they can plan their work and life more effectively is important to us and has been an absolute priority for me and my team,” Sarah Hunter, Officeworks managing director, said in the release.

    “I’m really excited that our team has overwhelmingly voted in favor of this Agreement. It’s such an exciting time at Officeworks and creating more stability for our team members will help us make bigger things happen together moving forward.”

    The Agreement will now be lodged with the Fair Work Commission for approval; however, the retailer said yesterday that it would immediately increase the base pay rate by 2 percent for all team members covered by the agreement.

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  • Australian dollar slides Again

    Australian dollar slides Again

    The Australian dollar has fallen Tuesday, buying 69.45 US cents from 69.75 US cents on Monday.

    Yesterday, the local currency lost ground as the stalemate in Sino-US trade talks clouded the outlook for the Asian giant in its demand for resources.

    The Aussie dollar slipped 0.4 percent to 69.75 US cents on Monday and ever closer to the recent four-month trough at 69.60 US cents.

    China is a major buyer of commodities from Australia so any threat to its trade is considered a potential negative for the currency.

    Investors also use the Aussie as a liquid proxy for China plays, in this case shorting it as well as the yuan.

    Joseph Capurso, a senior currency strategist at CBA, noted that Washington was due to release a “Section 232” report into the national security implications of car imports this week, which could give President Donald Trump more ammunition in his trade disputes.

    “Global stock markets, and global growth-sensitive currencies such as AUD and NZD, may be hit by fears a ‘trade war’ will spread,” Capurso said.

    “Europe, Japan, Korea, and Mexico are major exporters of cars to the US.”

    The Aussie also faces domestic hurdles from data on wages and jobs due this week, where any sign of weakness would fuel wagers on a rate cut by the Reserve Bank of Australia.

    The central bank last week emphasized that further improvement was needed in the labor market to bring unemployment down and lift inflation.

    Wage figures for the first quarter are due on Wednesday and are forecast to show modest growth for the year.

    The jobs report on Thursday is expected to show 14,000 net new hires in April, with the unemployment rate ticking up to 5.1 percent.

    “Downside surprises will raise pricing for a rate cut as soon as June,” added Capurso.

    “The AUD can drop more than one US cent if the labor data disappoints.”

    The futures market implies around a 63 percent chance of a quarter-point cut in July and is almost fully priced for a move in August.

    Yields on three-year bonds are already well below the 1.5 percent cash rate at 1.26 percent, and only just above record lows.

    Three-year bond futures were up one tick at 98.750, while the 10-year contract rose one tick to 98.2700.

  • Vietnam labor costs highest among ASEAN comparators

    Vietnam labor costs highest among ASEAN comparators

    Vietnam’s labor cost is the highest among comparator countries in Southeast Asia, a World Bank report says.

    In a report on enhancing enterprise competitiveness and enhancing small and medium-sized enterprise (SME) linkages, it says Vietnam’s labor costs are higher than in comparable Southeast Asian peers.

    It defines labor costs for each firm as the cost of all payments to all workers divided by the number of workers.

    It says wage costs about $2,739 per worker for the median Vietnamese firm, about twice as high as in Laos, Myanmar and Malaysia, and about 30 to 45 percent higher than in Cambodia, Thailand and the Philippines.

    While Vietnam’s labor costs are higher than in the rest of the region, they seem in line with productivity levels and thus do not seem to be a major obstacle to competitiveness, the report says.

    The average manufacturing firm in Vietnam produces about $10,500 worth of value-added per worker per year, higher than in most countries in Southeast Asia. It is around $10,000 in Malaysia, and $5,000 in Cambodia.

    Vietnam’s relatively high value appears to be partly driven by high and growing use of capital, the report says.

    The report also breaks down labor productivity in the country by region. The north-central and central coastal regions of Vietnam have the highest productivity — of almost $16,000 value addition per worker — while the southeast comes in second at $14,000.

    The Red River Delta region has a productivity of only $7,000, and it is even lower in the Mekong River Delta at around $6,000.

    It also said that foreign-owned firms are generally more productive than domestic firms, which can be explained by their easier access to technology and finance through their parent companies.

    The World Bank report also says that capital productivity is low in Vietnam. The ratio of sales to value capital in Vietnam is around 160 percent, lower than in any of its peers in Southeast Asia. The bank’s data confirms that capital might not be used very efficiently in Vietnam.

  • Vietnam labor unions, businesses remain locked in minimum wage dispute

    Vietnam labor unions, businesses remain locked in minimum wage dispute

    The National Salary Board met for the second time this month to discuss whether or not to raise the minimum wage of Vietnamese workers next year.

    The previous meeting had failed to reach an agreement.

    On Thursday, the Vietnam General Confederation of Labor (VGCL), which represents the laborers, repeat its demand for an eight percent increase in minimum wage, or by VND220,000-330,000 ($9.4-14.6) per month, depending on the area.

    This increase will meet 95 percent of laborers’ living costs, it said.

    However, the Vietnam Chamber of Commerce and Industry (VCCI), which represents businesses, disagreed, saying there should be no increase in minimum wage next year.

    Most business associations in the country don’t agree with the proposal to increase minimum wages next year, said Hoang Quang Phong, vice chairman of the VCCI.

    One of the reasons the two organizations have not been able to come up to an agreement is that they have different methods of determining minimum living costs, said Ngo Duy Hieu, head of the Department of Labor Relations under the VGCL.

    In order that Vietnamese laborers get a minimum wage that completely covers their minimum living costs, there should be an increase in their remuneration over the next two years that is suitable for businesses but also matches the contribution of laborers, he said.

    VGCL recently published a study on minimum wage and cost of living after surveying over 3,000 laborers in 150 different businesses in the country.

    26.5 percent said they were “barely getting by,” while 12.5 percent said their incomes were not enough to support their families, and have to work overtime or extra jobs to make ends meet.

    The study found that an average worker’s minimum spending is VND6.5 million ($290) each month, while the average base salary is just VND4.6 million.

    Thus laborers need to work on average an extra 28 hours a month just to make ends meet, the study found.

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  • Disruptive Technology, Automation Force Change in Workers’ Skills: McKinsey

    Disruptive Technology, Automation Force Change in Workers’ Skills: McKinsey

    Changes in global demand for different types of workforce skills, caused by the rapid growth of technology, will require business organizations to provide training programs to employees.

    McKinsey Global Institute (MGI), a think-tank of consulting firm McKinsey & Co., projects that by 2030, demand for technological expertise will increase by even 55 percent, while for social and emotional skills, needed in leadership and management, will rise by 24 percent. Demand for higher cognitive skills such as creativity, critical thinking, decision making and complex information processing will rise moderately, by 8 percent.

    According to McKinsey, some 800 million workers worldwide, or one-fifth of the global workforce, will lose their jobs to artificial intelligence.

    “Preparing for and managing the growing shifts in demand for different types of workforce skills represents one of the biggest challenges of the next decade. Our research highlights the big increase in demand for tech and social skills that are currently in quite short supply and an oversupply of skills that may be less needed in the future, including physical and manual skills,” MGI director Jacques Bughin said in a statement last week.

    Demand for basic cognitive skills, like simple data input and processing, will drop by 15 percent, while demand for manual and physical skills will decrease by 14 percent.

    According to a similar study by the Asian Development Bank, though technology has changed certain job tasks, it actually contributes to higher and faster economic growth, as automation will create higher demand for more goods and services, which in turn will create more new jobs to replace obsolete ones.

    Using data from 12 countries in Asia from 2005 to 2015, ADB estimated that 66 percent of jobs in the region, or 101 million jobs per year, were lost to automation. Among the most vulnerable are those in the manufacturing industry.

    After analyzing data in 12 Asian countries from 2005 to 2015, ADB estimated that 66 percent of jobs in the region, or 101 million jobs per year, had lost to automation. However, there was an 88 percent increase in employment over the period, or 134 million jobs per year, well offsetting the jobs lost to automation.The MGI and ADB reports are unanimous in their conclusions that working culture, training programs and organization structures must be redesigned.

    “Companies will take the lead in building their own future workforce, but all stakeholders — educators, foundations, industry associations, organized labor and of course policy makers — will have a role to play,” MGI partner Susan Lund said in the statement.

    “In our research, we identify a range of approaches and discuss the experience of some companies which are already engaging in large-scale workforce retraining,” she said.

    MGI suggests that companies and business leaders will have to decide in the coming years whether to pursue training using in-house resources or to partner with educational institutions that will provide external learning opportunities for employees.

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