How can Singapore Keep its Edge as a Hub for International Energy Trading Talent?

With the emergence of new trading hubs across Asia and the Middle East,?a mass exodus of expats, and a need to remain relevant and forward-thinking with the energy transition, how is Singapore addressing?these potential threats to its energy trading talent ecosystem??

Arguably, no talent pool is more diverse in?its?make-up than the energy trading space. As a regional stronghold, Singapore has long attracted companies from all corners of the globe, from global oil majors to Swiss and London-based traders, utilities and regional industry heavyweights from China, India and more.?With that, has come a healthy balance of expatriates?making up a sizeable proportion of the front office workforce.?

Recently,?however,?Singapore has faced?some?scrutiny concerning their approach to re-opening the economy in the wake of?the Covid-19?pandemic, giving wake to headlines?such as?“Covid Threatens Singapore’s Business Crown?(BBC)”?or?“Fed-up?expats?begin drifting away?from?Singapore?(FT)”.?This?in turn has affected the international trading community here,?as?many families look to return home, or move inter-region to better access business travel, especially now working remotely has become the norm, whether temporarily or not.?

Bloomberg reported?earlier in the year that Singapore’s non-resident population had dropped by over 10% compared with the previous year, primarily due to an exodus of foreign workers. From conversations with our network, we know this to be the case within the energy trading industry.?

On top of this, a new framework implemented by the Ministry of Manpower?has meant?there are now additional processes to complete?in order?to?hire anyone who is not a Singaporean Citizen or Permanent Resident.?These?measures?include?increased salary thresholds as well as?advertising any role for a minimum of 28 days before an application for a work visa can be submitted, encouraging companies to hire locally?first and foremost. Whilst hiring locals is a positive initiative, many vacant positions are unfilled, with the?The Straits Times?reporting that the ratio of job vacancies to unemployed reached a high of 1.63 earlier this year and that 27% of advertised vacancies were unfilled for 6 months or more.

With?an ageing population and a shortage of talent in sectors requiring a specialised skillset such as?commodity trading,?a diverse workforce?of local and international talent is vital to maintain competitiveness and bridge skills gaps where there the existing talent available falls short.?If we look at?the relationship driven nature of physical commodity trading for example, there is a fundamental requirement for trading businesses to have international front office teams, as?traders will need to operate in?markets?with language and cultural barriers. In commodity derivatives trading, Singapore has long attracted talent from markets in the US and Europe which are better established and where the candidate pool is more liquid.

At the same time,?Singapore is also competing more than ever with a burgeoning energy trading market in the Middle East.?The?likes of Abu Dhabi National Oil Company (ADNOC),?who established their?UAE based crude oil and refined products?trading arm in 2019,?as well as companies such as India’s Reliance, who are looking to cement their regional presence out of Abu Dhabi, are competing for global talent and are attracting individuals from Singapore.?Within?Asia Pacific, we are seeing more?activity from China who have expanded their port and refining facilities to chase Singapore’s tail in becoming the dominant marine fuel supplier in Asia. Over in Japan the power market has attracted attention with companies moving power traders to Tokyo and establishing entities there. In short, there are new talent flows coming out of Singapore, but are these?empty chairs being filled???

"Whilst Singapore can rely on its strategic geographical position?and corporate incentives,?it’s?vital that the city state can?adapt?and remain at the forefront of?broader?industry changes, particularly?with regards?to?digitalisation,?diversification?and? decarbonisation."

Singapore's Unique Position in Asia

Despite competition from?other?regions, Singapore?will always have a seat at the table, alongside the other major global hubs, thanks in most part to its stable economy and strategic geographic attributes. These include an English-speaking business culture, a high standard of living, a good governance track record, and an international shipping hub with one of the busiest and biggest ports in the world, making Singapore an attractive destination for foreign talent and companies. These geographical attributes already work in Singapore’s favour and partly explain why Singapore is the regional headquarters of commodity trading companies and MNCs, over and above neighbouring countries and economies.

Singapore continues to offer?lucrative incentives?for businesses, especially within the energy sector, setting up?here, with added benefits for companies that hire locally.?The Global Traders Programme (GTP) is a program?from Enterprise Singapore that has been?designed to encourage international trading companies to choose Singapore as a base for their global trading activities, with the core purpose to promote Singapore as an international trading hub?whilst also offering reduced corporate tax.??

Whilst Singapore can rely on its strategic geographical position?and corporate incentives,?it’s?vital that the city state doesn't become complacent about it's pre-existing advantages, and can?adapt?and remain at the forefront of?broader?industry changes, such as digitalisation, diversification and decarbonisation.?

Technology Innovation

Financial services firm KPMG?reports that this year Singapore topped the list as the leading technology innovation hub outside of Silicon Valley. Digitalisation in the commodities trading arena has led to widespread changes that have enhanced transparency, and companies’ success is dependent on how quickly and how accurately they can access and extract value from data.?As a?report from financial data group Refinitiv suggested, technology is altering the commodity trading landscape in a host of different ways – including changing hiring patterns. Those that embrace these changes are most likely to maintain a competitive advantage.?

" Whilst the government is developing and reskilling homegrown talent, it’s vital that it also prioritises bringing world class talent into Singapore to achieve its carbon ambition. "

The Energy Transition

This year we have seen trading houses,?majors?and other energy players?diversifying into other product areas, namely biofuels, renewables, and power & gas?markets, on a global scale which has filtered into Singapore, thus driving demand for talent in these areas, which didn’t exist on this scale in previous years.?

Singapore has grabbed headlines with the announcement of a new global carbon exchange and has set its sights on becoming the global hub for carbon trading.?Already, there are several global carbon services?present in Singapore, providing project development,?financing?and certification, but these serve as anchors?for the development of a larger?trading?ecosystem.?Speaking at APPEC in September 2021, a senior minister said that?Singapore was committed to helping companies muster the other ingredients required to stay competitive, namely digitalisation,?innovation?and a strong talent pipeline for their trading activities.?

The details of this talent pipeline remain to be seen, although a Centre of Excellence called the Singapore Green Finance Centre, backed by the Monetary Authority of Singapore (MAS), has been established already to develop talent and green finance research. Whilst these new skills are being cultivated, it’s clear that, as a?brand new?market, there will be a prevalent knowledge gap, thus requiring talent from overseas or a need to draw upon the existing pool of international commodity trading professionals in Singapore.?

Whilst the government is developing and reskilling homegrown talent, it’s vital that it also prioritises bringing world class talent into Singapore to achieve its carbon ambition. Anecdotally, from discussions amongst our network, we are aware that a number of professionals in carbon services are experiencing delays with visa applications, most likely for the reasons discussed above, with calls from businesses, hiring managers and candidates to fast track the process.

Singapore will remain a trading hub for energy commodities,?as long as?it puts itself at the forefront of?digitalisation?and the energy transition, embracing change and remaining ahead of the curve. The Little Red Dot will?undoubtedly?have to compete more and more for talent with other regions, meaning that the government should continue to welcome foreign?professionals with open arms whilst taking measures to encourage and train talent closer to home.

#Singapore #Talent #EnergyTrading #Decarbonisation #Digitalisation #Diversification #Commoditech