Onshoring on the rise among Singapore’s financial services operations

Singapore’s financial services companies are increasingly bringing their offshored operations back to the city-state. Read more here. 

  • 44% of Singapore’s CFOs within financial services have increased their level of onshoring in the last two years. 
  • 66% cite rising costs and 59% refer to lack of skills as the main reasons to increase onshoring. 
  • 43% say if Singapore’s skills shortage was alleviated, they would consider shutting down an offshore activity and return it to Singapore.
  • The top benefits of increased onshoring are: increased productivity (47%), increased service quality (44%) and customer responsiveness (44%). 

New independent research commissioned by specialised recruiter Robert Half has found Singapore’s financial services companies are increasingly bringing their offshored operations back to the city-state as companies are being affected by rising costs and a growing skills shortage in offshore regions, potentially leading to more jobs in the financial services sector. 

With Singapore ranking as the world’s No 3 financial centre , the research has found almost half (44%) of Singapore’s financial services CFOs have increased their level of onshoring – transferring offshored business operations back to Singapore – in the past two years, compared to 10% who have decreased their onshoring activities. A further 50% have increased their level of nearshoring – transferring operations to a nearby country in preference to a more distant jurisdiction – in the past two years. 

When asked why they have increased their level of onshoring, 66% of CFOs within financial services refer to the rising costs and 59% point to the skills shortage in offshore regions – indicating a financial and manpower motive. In terms of the quality of their operations, 48% further cite service complaints in offshore regions and 43% identify the lack of efficiency as one of the key reasons for transferring offshored business operations back to Singapore. 

Matthieu Imbert-Bouchard, Managing Director at Robert Half Singapore said: “Singapore’s financial services sector operates within a highly competitive global market with companies being under increasing pressure to maximise cost effectiveness, efforts only aggravated by a growing regional skills shortage. With the lack of skills in the offshore regions driving Singaporean financial services organisations to bring back activities to the city-state, this could potentially boost local employment within the financial services sector, resulting in an improvement in Singapore’s competitive position within the region.” 

In an indication that offshoring is not just a cost decision, but also a matter of dealing with the skills shortage in Singapore, more than four in 10 (43%) CFOs within financial services would consider shutting down offshore activities and return their operations to Singapore if the specialised skills they require would be available locally.

Onshoring can result in tangible benefits for Singaporean companies. Almost half (47%) of Singapore’s financial services leaders who have returned business activities to Singapore say it has resulted in increased productivity, followed by an increase in service quality (44%), greater customer responsiveness (44%) and an increase in cost efficiency (39%). 

“While a lack of skills in offshore regions are pushing certain financial services organisations to onshore their activities back to Singapore, there are still local financial services organisations with similar aspirations that are feeling hindered by the skills shortage in Singapore. The lack of local talent in key functional areas within financial services needs to be addressed as it can potentially lead to more operations finding their way (back) to Singapore, with positive knock-on effects for employers and the economy,” concluded Matthieu Imbert-Bouchard concluded. 

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About the research
The annual study is developed by Robert Half and was conducted in January 2017 by an independent research firm, surveying 100 Chief Financial Officers (CFOs) and Finance Directors within financial services in Singapore. This survey is part of the international workplace survey, a questionnaire about job trends, talent management and trends in the workplace.

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Gabrielle Nagy 
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