Last Updated on September 12, 2023
In the face of this unprecedented wave of employee turnover, many organisations are compelled to reevaluate their recruitment strategy while also exploring innovative approaches to sustain growth in the company. One viable solution gaining significant traction is outsourcing. But what happened that led to this and why is this wave of employee turnover being dubbed as “The Great Resignation?”
The COVID-19 Pandemic
The COVID-19 pandemic impacted and transformed all aspects of life, from health and social issues to the global economy. Singapore was not immune to such disruptions. When the pandemic first broke out in 2020, Singapore’s economy experienced a 5.8% decline, signalling the worst recession since Singapore gained independence in 1965.One reason for such economic decline was the Circuit Breaker and border restrictions that stalled economic activity, especially in the tourism and service industry, where approximately 4,370 workers were retrenched between January to October 2020. Such figures contributed to Singapore’s highest unemployment rate in a decade.
As time went on, however, Singapore started to slowly ease its border restrictions by introducing Vaccinated Travel Lanes (VTL) with neighbouring countries. Moreover, the government has successfully implemented one of the highest vaccination rates globally, with over 90% of citizens and residents fully vaccinated. With high vaccination rates, the government is easing social distancing and masking measures, gradually returning to life and economic activity before the pandemic.
The Great Resignation
Yet this return to normalcy doesn’t mean the number of employees willing to return to work match the pre-pandemic level. This can be seen via “The Great Resignation” phenomenon, where employees willingly quit their job in search of a better work life balance, which seemed unthinkable just a few years ago. Suddenly, many career-oriented individuals refused to heed the advice of “Just be grateful with what you have, given the economic conditions.”
The pandemic has given many people the opportunity to reflect and reassess their priorities and rethink what they genuinely want in life. Some choose this opportunity to find employment with better pay or start a long-lost dream of becoming their own boss by creating a business. Either way, companies have to pivot in their recruiting strategy and adapt to the current labour market.
Did you know that workers in Singapore are expected to receive an average salary increase of 3.5% this year? Annual salary increment tends to be the norm to allow Singaporeans to keep up with the rising prices of daily necessities, such as housing, food, and electricity. However, this is not a requirement by the government; it relies on the company’s discretion and empathy.
Remember that the inflation rate has been the highest in decades, compounded by the slow return of economic activities from two years of pandemic and the ongoing crisis between Russia and Ukraine, making wage increases not being able to keep up with inflation rates. One way for workers to circumvent this is by moving to a new company with higher pay than increases offered if one stays at a company, leading to higher turnover rates.
Outsourcing to the rescue
The Great Resignation leads to a high turnover rate, one of the big no-nos for companies. This can disrupt workflow, and it carries a high cost in recruiting and training.
Let’s say you run a company with a bookkeeper role that turns over every six months. You may not be able to track and keep up with your business expenses and income properly as you would with the same person in that position.
This is where outsourcing can be the solution. Outsourcing is the practice of hiring someone outside your organisation to perform tasks that are generally performed in-house. Tasks can include customer service, manufacturing, and various back-office functions. There are four reasons why this can be beneficial for your business:
1. Save time and money
Outsourcing tasks to a third party means that you don’t need to go through the process of hiring internal staff, saving you lots of time and resources. Moreover, you don’t have to conduct training or workshops as outsourcing will find the best qualified professionals.
You’ll also save on overhead expenses, such as the Internet, laptops, and office supplies. The outsourced company will be responsible for all of these as it’s part of your service-level agreement (SLA).
You also don’t need to pay for bonuses or worry about sick leaves with outsourcing. Outsourcing companies mostly consist of a group of professionals. If one has issues, the other is ready to step up to the plate to address your every need, so you’re not relying on a single person.
2. Access to top systems and expertise
Top-of-the-line accounting systems and software don’t come cheap; it can be quite pricey. By trusting a third-party service, you’ll get access to such software quickly at a more affordable price. This is particularly true for SMBs and startups who have a limited cash flow to begin with.
Aside from top systems, businesses also get expert advice from professionals with years of experience. Sectors such as the finance industry are constantly evolving, and you may not have the time to keep up with the ever-changing laws and regulations. Outsourcing your needs can help your business comply with the laws and regulations.
3. Minimise errors
Outsourcing companies work in teams; they often recheck each other’s work to guarantee that everything is correct before handing it to the client. This luxury is often not possible if you have a small team of internal bookkeepers, maybe even a single person!
There is also a risk if the bookkeeper is the only person to ensure that your business follows legal procedures like tax filings. If your internal bookkeeper makes a mistake, one wrong input could put the business in legal jeopardy.
As you can see, outsourcing offers several benefits for all businesses, not the least of which is peace of mind. With a proven track record and expertise in the accounting and finance space, Lanturn has a team of experts ready to help you promptly fulfil your every financial need.
4. More time to focus on the important things
Backend office functions distract from the day-to-day operations. And having your bookkeeping in-house can lead to problems, such as conflicts of interest or employee indiscretion.
Outsourcing can free your valuable time to think about how to improve the company instead of performing mundane tasks. Additionally, a third party can give you a clearer and more objective assessment of your business’ health or situation, which you may not get from an insider perspective.
Ready to get started today? Don’t hesitate to contact us now.