A shortage of skilled workers and cost savings have led a majority of banks and finance companies in Singapore to turn to outsourcing some of their business functions overseas.
In a survey conducted by finance and accounting specialist recruitment firm Robert Half Singapore, it was revealed that three in four companies in the banking and financial sectors have opted to redirect their more transactional roles such as accounts payable and receivable, and payroll to offshore vendors. Other functions being outsourced include billing and invoicing, and financial accounting and reporting
Stella Tang, Director of Robert Half Singapore, said: "In Singapore, the drive to offshore comes from the need to keep costs down, as well as the inability to recruit staff to perform certain accounting and finance functions locally.""
The survey, which was conducted on 150 senior business leaders within the banking and financial services sector in Singapore, revealed that for firms which offshored their services, more than half said that they were able to achieve lower operating costs. More than a third cited access to staff resources not available locally as one of the benefits of offshoring.
The survey also showed that outsourcing these operational functions can benefit the company regardless of their size. Small and medium-sized enterprises (SMEs) can capitalise on cost savings while large companies can have access to a greater pool of talent.
"While the SMEs are more concerned with managing costs, large enterprises are more concerned with solving talent shortages. By offshoring some of their business functions, large firms can concentrate on the more strategic functions that provide the greatest benefits to their customers," Ms Tang said.
However, Ms Tang also highlighted that outsourcing could bring risks to the company. They vary from the quality of the services and products being delivered to the impact on current employees. The company could also become vulnerable to intellectual property loss.
Despite the current trend in outsourcing, Ms Tang revealed that some companies have discontinued the use of offshore vendors after being disatisfied with the quality of service.
She reassured new graduates and job seekers looking to enter the financial services sector. "Although offshoring is widely practised, there is still a demand for financial services talent in Singapore. Candidates who have technical knowledge and ability, as well as strong interpersonal and communication skills are highly sought after by companies," Ms Tang said.