By WINSTON CHAI

AS THE economy dives deeper into its worst-ever tailspin, most technology companies in Singapore will not be resorting to retrenchments to lighten their load in the coming months. They are instead adopting measures such as IT budget cutbacks or expanding job scopes to ride out the economic maelstrom, a new survey shows.

According to the survey on first-quarter hiring expectations released last week by recruitment firm Hudson, 69 per cent of companies in the IT&T (information technology and telecommunications) segment plan to keep their headcount steady over the next two months.

This figure is the second-highest across the six vertical sectors covered by the quarterly Hudson study, which polled 3,000 employment decision makers across four countries in the Asia-Pacific region.

Job security concerns

This finding could help alleviate some concerns over job security against the backdrop of recent job cuts across the Singapore units of several multinational technology companies. Motorola axed a few hundred local positions from its embattled mobile devices unit last Thursday, while others including Seagate, Lenovo and Nokia have also downsized their Singapore operations in recent months.

To help retain jobs, authorities have introduced a number of new measures under the Republic's mammoth $20.5 billion budget. The government will give employers a whopping $4.5 billion to offset staff costs under its temporary 'Jobs Credit' scheme.

This initiative anchors the government's $5.1 billion employment aid package, which also incorporates other measures such as training incentives and wage top-ups for lower-income workers.

In Singapore, only the consumer sector was ahead of the IT&T segment when it comes to employee retention, with 76 per cent of the respondents indicating they plan to keep their staff base intact.

Twenty-one per cent of the tech companies polled even plan to ramp up hiring during this difficult period, while 10 per cent said they plan to reduce staff numbers over the coming months.

'Any IT roles related to revenue generation will be a priority whereas IT roles classified as cost headcount will be scrutinised. Lean and mean is the way to go,' said Yeo Gek Cheng, director of IT&T at Hudson Singapore.

'Several companies have placed their headcount plans on hold, reduced their IT budgets or restructured their business to cover more scope with the same resources. Hiring managers are instructed to be prudent in expenses and to present solid business cases when evaluating new headcount,' she added.

Bucking the prevailing mood of belt-tightening, technology firms that are in need of manpower are still willing to pay top dollar for the right candidate, the Hudson survey revealed.

Manpower shortage

'Respondents in the IT&T sector expect to have to increase new hire salaries the most,' Ms Yeo told BizIT.

Forty-one per cent of the IT&T respondents who plan to add headcount said they are prepared to increase salaries for new staff by 11-20 per cent. A further 5 per cent of them are even prepared to pay 20 per cent or more, the report said.

While these figures have dropped from the previous quarters, it continues to reaffirm the issue of manpower shortage that has been confronting the IT industry in the last few years.

'Singapore, like many Asian markets, is still short of top talent. The financial turmoil impact might make it less of a shortage situation but does not change it fundamentally,' Ms Yeo explained.

Across all the six sectors, the Hudson survey found that 65 per cent of companies will hold on to their current headcount in the first quarter, while 12 per cent of businesses will lay off some employees.

And despite the adverse headwind, 49 per cent of the firms polled still rate their 2009 prospects as 'excellent' or 'good'. Forty-seven per cent of companies said they may miss targets and turn in an average performance, with the remaining 7 per cent saying their full-year results are likely to be poor.

This article was first published in The Business Times on January 26, 2009.