Unlocking human capital potential amidst economic flux

In the bustling metropolis of Singapore, where innovation and entrepreneurship thrive, small and medium enterprises (SMEs) form the backbone of the economy. As we step into 2024, amidst a landscape of unprecedented global challenges and opportunities, the 2024 Singapore SME Sentiment Report by Employment Hero offers a compelling narrative of resilience, optimism and strategic foresight within the SME community.

At the heart of Singapore’s SME ecosystem lies a spirit of optimism, undeterred by the uncertainties that loom on the horizon. According to the report, an overwhelming 82% of business leaders expressed confidence in their organisation’s growth prospects for the year ahead. This sentiment however, is not evenly distributed, with micro and small businesses (58%) exhibiting a more cautious outlook amidst concerns about future uncertainties.

Kevin Fitzgerald, Managing Director (Asia) at Employment Hero, reflected on the emerging trends, noting the gradual resurgence of confidence among SMEs, and said, “We are seeing green shoots in a lot of areas. SMEs are starting to feel more confident having gone through some challenging years. Some are still concerned, tightly managing their expectations and business. But who would blame them? It’s been quite difficult to get a clear line of sight on the economy.”

As business leaders gaze into the crystal ball of Singapore’s economic landscape, the sentiment remains cautiously optimistic. Over 60% of surveyed leaders anticipated a favourable performance for Singapore’s economy over the next 12 months, buoyed by projections of modest growth and recovery.

Embracing the winds of change

Within the vibrant tapestry of Singapore’s SME landscape, challenges and opportunities intertwine, shaping the trajectory of growth and resilience. As SMEs gear up for the coming year, they face a delicate balancing act between navigating obstacles and seizing potential avenues for advancements. Hence, it becomes imperative for business leaders to remain cognizant of the key issues at hand and to prepare their organisations accordingly.

When surveyed, business leaders highlighted rising costs and inflation as their primary concern, with 43% expressing worry. Following closely behind were challenges related to employee retention (31%), cashflow management and employee upskilling (both at 29%). To address these issues, SMEs are taking proactive measures such as implementing cost control initiatives (35%), optimising their workforce (35%), and exploring new supplier partnerships (29%).

Moreover, embracing technology solutions like HR and payroll software, project management tools, and accounting software plays a pivotal role in streamlining operations and reducing operational costs. This strategic use of technology not only enhances efficiency but also bolsters the resilience of SMEs, making them better equipped to navigate uncertainties and emerge stronger amidst tough times.

The report also found that medium-sized organisations stand out with higher approval rates for government grants, with 61% of surveyed business leaders reporting successful applications for the SkillsFuture Enterprise Credit. Conversely, micro and small businesses appear to be less aware of available grants such as the Start Digital Scheme and the Grow Digital Scheme. Micro and small businesses are also more likely to have not applied or not be aware of available grants compared to medium-sized businesses, potentially due to resource constraints or lack of familiarity with the application process.

Beyond grants, business leaders expressed a desire for increased access to technology and innovation resources (36%) and more subsidised talent acquisition and retention schemes (35%). Furthermore, they seek a streamlined grant application process (34%) and enhanced support for international expansion (33%), along with rental assistance and infrastructure support (32%).

Amidst challenges, SMEs are not merely passive spectators but proactive architects of change, seizing opportunities for growth and innovation. Digital transformation, AI, and automation emerge as key priorities, underpinned by the Singapore government’s vision of a Smart Nation ecosystem.

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The report cited initiatives such as the SMEs Go Digital Programme and SkillsFuture Singapore’s training programmes that offer a roadmap for SMEs seeking to embrace technology and upskill their workforce. By harnessing these opportunities, SMEs can unlock new avenues for competitiveness and resilience in an increasingly digitalised economy. 

Charting the course for success

By understanding the sentiment, challenges, and opportunities outlined in Employment Hero’s 2024 Singapore SME Sentiment Report, HR professionals and business leaders can make informed decisions and navigate the dynamic landscape of 2024. Embracing technology, investing in talent development, and seeking targeted government support will be key to overcoming challenges and achieving sustained growth. The spirit of SMEs in Singapore remains strong, and by addressing the talent conundrum, they can capitalise on the opportunities that lie ahead, charting a course for success in the new year.

To download Employment Hero’s 2024 Singapore SME Sentiment Report, click here.

Join Kevin Fitzgerald at the Power Talk Stage content theatre on April 25 at 11.40am, as he shares insights on empowering the future of SMEs through digital strategies for talent and growth. The Power Talk Stage is part of HR Tech Festival Asia 2024, which is taking place from April 24-25 at the Marina Bay Sands Expo and Convention Centre in Singapore.