Often when we travel, we have an opportunity to sit next to people who have different and interesting perspectives. One such plane ride was my recent trip from Kuala Lumpur (KL) to Bangkok. There I sat next to a young man responsible for global investment for a major, Fortune 50 multinational organization.
He explained that his company had closed their office in KL in favor of opening one in Singapore. He explained that the cost of living in KL for employees being paid in Ringit (the currency of Malaysia) was higher than for those living in Singapore paid in SNG dollars, so they had an easier time hiring and keeping staff in Singapore than in KL.
Although for people in the US, this concept would be counter-intuitive because the exchange rate is so much better Ringit to US dollars versus SNG dollars to US dollars, when explained in this way, it makes a lot of sense:
Your employee in Malaysia may be paid 6000 Ringit a month; a comparable employee in Singapore will be paid SNG $6000. A bowl of soup in a restaurant in KL will cost 4 Ringit, while in Singapore, it will cost SNG $2. This standard of living for the employee in Singapore will be MUCH better. And this relationship goes for housing and other needs as well. What does this situation mean for employee retention in KL? Of course, it's not good news.
It's a perspective I had never considered before. The most thought-provoking question is, "What does this mean for different parts of the US that are engaged in the war for talent?"
My forecast, look for city fathers and economic developers to address these issues with company prospects. Housing, infrastructure, and the availability of entertainment will all be important to the prospective workforce.
Looking Forward. . .
Joyce Gioia-Herman
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