This forward-looking policy may help firms build a stronger workforce in leaner times
While many in the Asia Pacific (APAC) have been outperforming their global competitors in recent months, a slowing growth rate of working age populations across the region threaten to erode their economic and fiscal progress.
Over the last five years, the average age of Singaporean workers has been rising, with similar trends found all across the APAC region. Today this ageing labour force faces exponentially sophisticating needs as industries barrel ahead into the future. So how can firms keep up?
According to a new study by global credit rating service Moody’s, investing in a more inclusive HR system could be the answer.
Their study examines the credit implications of evolving demographic profiles, as well as the changes in HR quality in the APAC and surrounding region. They found that, by adopting more forward-looking policies and behavior changes, firms can offset the ill effects of workforce shrinkage and foster higher participation and higher productivity.
Past economic growth in the region has often been attributed to an increase in labour force participation. This is true in advanced economies like Singapore and Malaysia, as well as lower-income economies like Pakistan.
As such, slower population growth and a narrowing labour force could potentially derail the general progress that the APAC region has been enjoying for the past 17 years.
Attempts to increase the quality of education and reduce gender gaps in both education and employment could offset the impact of Asia’s demographic headwinds, the report said. While the population may be shrinking, raising labour force participation is still possible by reaching out to and empowering currently non-working members of the population.
While in Mongolia, there are just as many, if not more, female workers in the labour force than there are male workers, there continue to exist large gaps in many South Asian countries.
“Across the region’s emerging markets, a 50% cut in the labour force participation gender gap would offset the labour force slowdown by up to 1.7 percentage points”, the report claimed.