Hiring/package trends for Expat IT Executives - MNC/Local

[dolphin_brother]

I have just begun looking at opportunities in Singapore and stumbled upon this forum. I'm hoping you all can help provide some general perspective (understanding every situation is unique, and "it depends" is the blanket answer for everything).

My specifics: 20-year IT career, mostly Infrastructure and Enterprise Architecture, currently at a large US-based bank. Current role is SVP/Director over a group of 250, US $100 million budget, datacenters, enterprise apps, middleware, operations, security, etc.

So, a few questions:

In your experience, are MNC's or local firms actually hiring external, international applicants in senior management (Director-level and above) IT executive positions? Or are most of these positions being advertised with the intent of attracting local residents? Are MNC's still transferring senior IT leadership positions in from other countries in general, or is the balance more toward local residents? My sense is there is a ton of IT talent in Singapore and there is an advantage in being local; just wondering if there is still non-local IT leadership hiring happening at significant scale.

I've read a number of posts and articles saying that expatriate benefit packages are shrinking or being eliminated. For US-based MNC's, is this true across the board? Or are packages covering, e.g., work permits, some or all of housing, education for children, etc., still offered for particular technical talent or senior management? For what types/seniority of roles are these packages still offered by MNC's? Are companies based in Singapore offering these types of benefits to foreign applicants at all?

Again, I know these are broad questions, but any perspective you can provide would be tremendously helpful!

[sundaymorningstaple]

I think one of our moderators, Strong Eagle is just the guy you need to talk to. It's right up his alley. Hopefully, he'll see this a little bit later as he's currently in Houston so he's still in downtime I would imagine.

[Strong Eagle]

I started a project management business in Singapore that catered to large scale, mostly in distress, IT projects... IT refreshes, server consolidation, managed services support, and call center setup. I also managed service operations in Asia on a temporary basis for a year for a large MNC. Here are a few of the things I observed while I did this.

1. Except for a handful of people, a large IT support call center company shut down in Singapore and moved its entire operations to Manila. I was involved in trying to sort out a huge support mess for the client I was working for.
   
2. Another large managed services company shut down its call center in Singapore and moved it to Kuala Lumpur. I was contracted to get it up and running.
   
3. A large global bank moved its in house call center services in Singapore and Manila to an outsourced call center managed in Manila. At the same time, they moved a large number of back office functions to Manila, and they replaced all local bank onsite support staff with managed services support staff. I ran the project to make this happen. By the time it was all said and done most of the country IT managers had been eliminated in favor of a much smaller regional management staff.
   
4. A large MNC outsourced all onsite support services. All local staff were replaced with cheaper support services staff. The IT managers for each country saw their jobs turn from technical to reporting, and eventually, their jobs were eliminated in favor of regional vendor management.
   
5. A large MNC moved all of its tier 2 support services from Singapore to Kuala Lumpur. Some 50 techs and system architects were given the choice to move to KL at reduced pay or move on. The VP overseeing the operations wasn't included in the move, and now there are just a handful of IT people in Singapore, mostly reporting to the global PMO.
   
6. This same MNC had its vendor management operations in KL for things like managed services, printer support, phone support, and global cloud management. The staff was shrunk by more than half as global support teams took over management responsibilities. Of course, this meant that the people in KL were on the phone at 8 at night, while the Americans were on the phone at 7 in the morning, but so what. The manager is now part of a global vendor management team.
   
7. Here is the biggest difference I observed between the time I arrived in 2004 and the time I left in 2013. When I got to Singapore, the MNC's may have been global but IT operations were regional. When I left most every MNC I was aware of had consolidated its IT operations into a global PMO based in Europe or the USA. The only exception that I am aware of is Standard Chartered which moved its global operations to Singapore.
   
8. For example, the first time I did a PC refresh for a MNC, I reported to the regional IT VP and all of the decisions concerning servers, asset management, software management, security, etc, were made at the regional level. The second time I did a refresh and managed services rescue for this company, the entire project was designed and managed out of a European PMO.

This move towards global PMO's essentially destroyed my business model. Selection of vendors and project managers was now being done in Europe or the USA. The MNC's wanted vendors with global scope and a single contract (not that I ever saw this work out very well but that's what they wanted). Gone was the regional responsibility and relationship.

I also watched the erosion in Asia of high level IT staff and associated managers within banks and MNC's, as the design and build functions were moved to the global PMO and the implementation and service operations were outsourced to the low bidder, usually on a global contract.

Thus, I would say to you: While I am sure there are probably senior level positions still available, this trend towards globalized and centralized ICT management is only going to accelerate as IT services become more and more of a commodity. Why keep your own servers when you can virtualize and do it all in the cloud? Why keep tech teams in each country when remote access is the norm? Why keep senior IT management in Asia or South America when the whole thing is being run out of Europe or the USA?

I judge that if you had a desire to work in Singapore, you'd need to be connected to the global PMO for operations. And yes, I've seen executives rotated in and out to "understand" what the folks out in the hinterlands are doing... and that's South America as well. I just don't think you'll have much success rolling into Singapore and getting a job... you're going to have to do it where the management power lies.

Yes, there are still opportunities in security, or working for an IT (HP, Lenovo, Dell, Toshiba) or managed services vendor, or for a project oriented company like Datacraft but the business is cut throat and the pay sucks. Because of the MNC's desire to cut costs, it has been a scramble to the bottom in terms of pay, skills, and qualifications of the people that are being hired. It used to be the goal of the MNC's I contracted into to set IT support expense at about 1 percent of revenue... now the goal is one half of one percent.

You're not going to get much traction in local companies, either. You didn't do national service with all your buddies, you don't have a network, you don't speak Chinese, and face it, you're Ang Mo... the white outsider.

[dolphin_brother]

Thank you for the honest and detailed response! Exactly what I was looking for. I appreciate the perspective both with the MNC's and the locals (which is not in any way a surprise to me, but not having any information on locals, I figured I would ask).

The MNC info (both the anecdotes and the analysis) is particularly interesting to me, though. It contrasts with what I've heard elsewhere that Singapore is somewhat of a regional hub for MNC's where there is still some autonomy and strategic direction for the region. You seem to suggest that, at least for IT services, the "middle layer" is being cut out for efficiency purposes, with the HQ or home office dealing directly with the lowest-cost providers in other parts of Asia (and presumably, after Malaysia it will flow to another emerging economy with even lower costs, and so on). I would think that Singapore then becomes an individual market rather than a hub for IT services and infrastructure.

Again, thanks for replying. I really appreciate the info!

[Strong Eagle]

Yes, Singapore is indeed a regional MNC hub and is in direct competition with Hong Kong as the most desirable destination for executives. Sometimes Hong Kong seems to be losing the race because of the pollution from mainland China, and it nevertheless continues to be a great city. Singapore is perhaps the most "western" with English as the primary language and a strong British influence. Either city is much easier to live in than other Asian cities... Bangkok, Jakarta, even KL.

And yes, the middle layer is being chopped out. And in Singapore, it's even worse. Many of the managed service providers got cheap talent by hiring Indians on contract, then used them to replace permanent Singaporean employees for onsite tasks. And for the longest time the Ministry of Manpower apparently was more than happy to grant EP's and S passes to contract workers employed by a body shop who farmed out the employees to the MNC's.

The net effect is that many entry level jobs for Singaporean graduates disappeared, and that is turn is going to create a void in skilled middle managers with a few years of experience. MoM has apparently wised up to this as it seems that many, many body shop pass applications are now on hold. It will be interesting to see what happens next.

IT is not the only thing moving out of town. Singapore has expensive labor, relatively speaking, and rent costs are very high. I've seen HR functions consolidated across the region for MNC's and moved out of Singapore. Same with invoicing and billing. Once you get a big global SAP system actually working, clients can check their own orders real time, and the worker bees can be anywhere you can stick in an RJ-45 connection.

The things that I see that remain in Singapore, especially at the executive level, are sales and marketing, mergers and acquisitions, legal and lawyering, and logistics, all of which require local presence and know how. Singapore works hard to hold onto the manufacturing it has, and is trying to entice high tech verticals in pharma, biotech, and the like to relocate to Singapore so I reckon their are executive level opportunities there as well.

I noticed that your background is infra and enterprise architecture... even bigger players like Dell didn't keep these kind of high level people in Asia... imported, as required, when a client was looking for that kind of solution.

If you've been in the business for 20 years, then you know IT has been rather cyclical in nature. On one end, as IT usage grows, expenses explode, and compatibility erodes, there is a big push for centralization. Then after a while everyone starts chafing with centralized control and business units complain that their fundamental business needs aren't being met, and the pendulum goes the other way... more decentralization, less focus on global structure and more on local.

This time, though, I think we will see a radical and permanent change it what IT is to a company. Cloud computing and high speed networks remove the need for infrastructure, so say goodbye to the infra techs and managers in a MNC, just about anywhere. Let Amazon or Google, or Microsoft handle that. Likewise, remote support, and onsite people who no longer repair stuff, but just swap it out, become the norm.

You are going to see independent IT budgets disappear, and have individual operating units take on a budget line for IT services. Global IT takes on the design and build of corporate wide systems that all must share, and they build what the operating units want using software teams located anywhere in the world. The operating units decide how they want the data pipe coming out of the wall to be used... laptops, tablets... you name it... gone is the standardization and regular refresh cycles.

[Strong Eagle]

One more thing: There are quite a number of mega data centers in Singapore because of a push towards server consolidation and virtualization, and because people are wary of setting up servers in China and India, and infrastructure to support them doesn't really exist anywhere else... well, the technology corridor in Malaysia can... but Islamic extremists and near do wells have certainly caused companies to pause.

I think there are about 45 data centers in Singapore and it is the giant cloud providers that will eat up most of the capacity. Nice place... no earthquakes, no hurricanes or tsunamis, and tons of submarine cables to hook everything up.

Singtel is the big operator followed by Equinix, Keppel Datacenters, and NTT Communications. I think at one time even Toshiba was in that show. I am pretty sure that Singtel is expat managed. Maybe opportunities exist here.

[okonu]

From your post you talk about "US based MNC" so I am making assumption that you are US citizen. Note that US citizens, for tax reasons, don't make cost effective expats vs Commonwealth/ EU countries (UK, India, OZ, France etc) or Filipinos. So unless it is your current company relocating you, expat packages only need to be enough to attract high quality expats from those countries, and you are at a disadvantage (in take home terms) due to global US tax regime. The two MNC I have worked for have had very few US employees outside the US for this reason, and even then a few of those ended renouncing US passport for tax reasons

[Hidy Ho]

I would think that Singapore then becomes an individual market rather than a hub for IT services and infrastructure.

I don't see too many Singaporeans in IT (not at my company - USA MNC). Most that I thought were Singaporeans turned out to Malaysian imports. Strong Indian presence in mid-management and worker bees (along with some Filipinos). And our "true" executives are back in USA. We're just middle/upper-middle management at best here. Also I have been told by locals that IT is not considered attractive career here compared to say "Finance". In USA, people thought I was clever to give up my CPA based career for IT. Here, they think I must've been nuts to do that.

With India being so close by, it's hard to build an IT hub here. Like others, we are building strong(er) presence in India for IT and Philippines for call center.

[bgd]

In the finance industry I have seen all of this over the last 10 years. The disappearance of the expat package, the movement of roles to cheaper locations, the general de-skilling that goes with that and generally just a focus on cost saving. Now we are moving into machine learning and robotics which will further reduce headcount. Even the cloud is finally making an appearance.

If you have the right skillset (robotics, etc) then there are middle to senior roles available here. But otherwise, unless you transfer in, Sg is a tough market to crack.

[dolphin_brother]

This time, though, I think we will see a radical and permanent change it what IT is to a company. Cloud computing and high speed networks remove the need for infrastructure, so say goodbye to the infra techs and managers in a MNC, just about anywhere. Let Amazon or Google, or Microsoft handle that. Likewise, remote support, and onsite people who no longer repair stuff, but just swap it out, become the norm.

You are going to see independent IT budgets disappear, and have individual operating units take on a budget line for IT services. Global IT takes on the design and build of corporate wide systems that all must share, and they build what the operating units want using software teams located anywhere in the world. The operating units decide how they want the data pipe coming out of the wall to be used... laptops, tablets... you name it... gone is the standardization and regular refresh cycles.

Yes, I completely agree. I'm seeing this in multiple ways. About half my support portfolio is cloud or SaaS today and a good deal of my peoples' time is spent plumbing it, securing it, and hammering on providers to meet our needs. The other half of the portfolio stays onsite due to US banking regulations (and is eroding a bit each year as we receive approval to move more and more of it off). For my peers in companies of similar sizes that aren't regulated as tightly as we are, most of the infrastructure is already gone.

This perspective has been very helpful. I'm disappointed but not surprised that the big MNC financial companies are probably not a good fit based on all this. I think my approach is going to be to keep an eye open for opportunities at the MNC technology companies and/or datacenter/cloud providers, understanding the low probability of anything being available, but perhaps over time something might pop up. I've got plenty of time, so I expect I won't be disappointed if there just isn't much movement in this space.

Thanks again for sharing your thoughts. Very helpful.

[dolphin_brother]

In the finance industry I have seen all of this over the last 10 years. The disappearance of the expat package, the movement of roles to cheaper locations, the general de-skilling that goes with that and generally just a focus on cost saving. Now we are moving into machine learning and robotics which will further reduce headcount. Even the cloud is finally making an appearance.

If you have the right skillset (robotics, etc) then there are middle to senior roles available here. But otherwise, unless you transfer in, Sg is a tough market to crack.

Thank you for the perspective from financials. That was one of the initial target areas as I started my search, but all signs seem to indicate that the industry is bifurcated with most of the senior-level decision-making happening at their home HQ and only pieces of the execution happening in places like Singapore. I appreciate your thoughts here.

[dolphin_brother]

From your post you talk about "US based MNC" so I am making assumption that you are US citizen. Note that US citizens, for tax reasons, don't make cost effective expats vs Commonwealth/ EU countries (UK, India, OZ, France etc) or Filipinos. So unless it is your current company relocating you, expat packages only need to be enough to attract high quality expats from those countries, and you are at a disadvantage (in take home terms) due to global US tax regime. The two MNC I have worked for have had very few US employees outside the US for this reason, and even then a few of those ended renouncing US passport for tax reasons

Yes, I am a US citizen and so this is another very helpful data point for my search. Thank you!

[Strong Eagle]

Thank you for the perspective from financials. That was one of the initial target areas as I started my search, but all signs seem to indicate that the industry is bifurcated with most of the senior-level decision-making happening at their home HQ and only pieces of the execution happening in places like Singapore. I appreciate your thoughts here.

The one thing that did hang around Singapore on the bank job I did was the trading desk. While the rest of the peons in the bank got a Philippine call center and SLA's long enough to make a productivity manager weep, the trading desk had onsite support in the trading rooms... dudes at the back of the rooms ready to jump up at a moment's notice to take care of issues... otherwise sitting around playing games on their smartphones.

[Strong Eagle]

From your post you talk about "US based MNC" so I am making assumption that you are US citizen. Note that US citizens, for tax reasons, don't make cost effective expats vs Commonwealth/ EU countries (UK, India, OZ, France etc) or Filipinos. So unless it is your current company relocating you, expat packages only need to be enough to attract high quality expats from those countries, and you are at a disadvantage (in take home terms) due to global US tax regime. The two MNC I have worked for have had very few US employees outside the US for this reason, and even then a few of those ended renouncing US passport for tax reasons

Yes, I am a US citizen and so this is another very helpful data point for my search. Thank you!

Yes, the US way of dealing with things is onerous... and... the earned income exclusion for 2017 is $102,100. Setup properly, you can also take advantage of housing cost exclusions. And, if you do have to pay duplicate taxes, you get a US tax credit for all taxes paid in the foreign country.

Downsides, at least for Singapore, is that SG tax rate is lower so that you have to pay US sized taxes. And, all non-earned income sources (rents, dividends, etc) are taxes at a rate as though the exclusion were not in place.