Thais VS Expats: Who is in demand?

The establishment of the ASEAN Economic Community (AEC) in 2015 has transformed the regional economy into an integrated single market encouraging free flow of goods and labour. Together with the Thai government’s “Thailand 4.0” mandate, do Thai professionals have what it takes to compete? Is there still a need for expatriates as more local candidates are returning to professional employment?

The current state of the Thai labour market

According to The Nation (2016), it was reported that 83.5 per cent of Thailand’s workforce are unskilled workers, putting the country at one of the most critical in ASEAN in term of a skilled-labour shortage. This issue was caused by two main reasons: “Skills Mismatch” and “Informal Employment” (SCB Economic Intelligence, 2015).

The industrial sector contributes to about one third of the country’s GDP, and this sector is undergoing a transformation from heavy industry to high-tech. (Oxford Business Group, 2018). However, the majority of students (the future workforce) do not choose the same path. The statistic shows that around 50 percent of total students enrolled in Social Science, Business, and Law, while less than 13 percent took courses in Engineering and Technical fields (SCB Economic Intelligence Centre, 2015). As a result, the government has implemented policies to encourage more education in these innovative areas to reflect the higher workforce demand following “Thailand 4.0”.

The statistic also shows that after the 1997 Asian Financial Crisis, the number of graduates pursuing careers in an informal employment environment, including self-employed and working unpaid with small family businesses (less than 5 employees), has increased significantly from around 13 per cent in 1997 to about 30 per cent in 2012. However, this trend has been declining ever since, seeing more professionals entering the professional market (SCB Economic Intelligence Centre, 2015).

A closer look at industries

What we have been seeing recently and will continue to witness are a higher number of professionals available in the market for commercial and support functions, such as sales, marketing, finance, human resources, and digital. However, with digital transformation being in an early stage, local candidates in the high-tech and innovative areas, such as biotech, robotics, software development, and Internet of Things are still in short supply. We will see some companies hiring expatriates to set up strong foundations within these areas with the view of developing local employees as leadership successors.

The local advantage

Employers decide to hire local Thai professionals over expatriates for the following reasons: cheaper compensation packages, no need for visa and work permit requirements, no language barrier, and no need to adapt to a different culture. This has resulted in a shorter recruitment cycle to secure qualified candidates.

Companies are most likely to recruit local employees, unless there are significant needs for particular skillsets that local employees cannot offer. My experience in recruiting HR professionals has proven this statement to be true, as all the roles that I worked on in the past years with Michael Page in Thailand only accepted Thai candidates. Also, my colleagues across functions have witnessed the same scenario.

However, there are still places for foreign candidates. For example, at Michael Page Thailand, my colleagues and I work on finding professionals for roles in crypto currency, automation and quality assurance, all of which are open to expatriates, as there are not enough qualified local professionals currently on the market to match increased demand.

How to stand out in your job search

It does all sound like a bright situation for recruiters and employers to easily secure candidates with higher number of local candidates available in the market. However, this doesn’t mean that Thai professionals can become complacent. In many cases, I have to turn down local professionals who apply to open jobs, for several reasons:  they are job hoppers, they do not have proven experience in MNCs, or their level of English is not quite there.

Therefore, my recommendations to local Thai professionals is to not changes jobs often (tend to aim for at least 3 years per job) and improve your English proficiency. On the other hand, if you are an expatriate, look for jobs in technical and unique areas such as robotics, Internet of Things, software development and biotech.