The State of Thailand’s Workforce 2016

Thailand has faced a few challenges to its economy in recent times with its well-documented political turmoil. This has unfortunately led some to question the viability of Thailand as a suitable location for SE-Asian market entry. Despite these market difficulties, we are seeing the opposite pattern for our clients and find that the job market is flourishing.

With an unemployment rate of just 0.9%, the Thai market-place is a highly competitive one and remains a great opportunity for those considering setting up in the region. The Thai workforce is positioned very well regionally, with a high standard of education and widespread experience working for foreign firms and under foreign management.

In this post we’ll touch upon the local talent pool in Thailand. We will look at some trends in the job market that we’ve picked up on, and things that you should be aware of when considering market entry.

Education & Language Skills

When it comes to higher education qualifications, you will find that Thailand is well-placed in the region. 48% of the relevant age group enrolled in higher education in 2010 and this is a trend that remains stable with 196,000 students entering higher education in 2012 (Source: Unesco). Of those that enroll, Thailand sits behind only Japan and South Korea regionally in terms of gross graduation ratios (Source: Unesco).

As such, the vast majority of working professionals within Bangkok hold bachelor degrees. There are many accredited local universities in Thailand, the top three being Chulalongkorn, Thammasat & Mahidol. International companies seeking local graduates tend to target these three institutions first as they produce the highest standard of graduates in the market.

Many graduates will also go on to study for a master degree as well. An increasingly popular option we are finding is for students to complete their bachelor degree in Thailand, then study for their master’s abroad. In addition to the high standard of education offered in places like the U.K., U.S.A. and Australia (which tend to be the most popular), it’s common place for the students to return with much more advanced English language skills. This makes them an even more appealing candidate for consideration.

With Thailand long being a place of interest for foreign business, foreign language skills are a pre-requisite for many people looking for work in Thailand (particularly Bangkok). With a high standard of education and an increasingly well-travelled populous, Thailand’s appeal for international organizations is ever present.

Culture

Many working professionals in Thailand arm themselves with higher education qualifications which help launch them into the job market. Thai employees on the whole are very approachable and willing to learn new things. They also tend to be very open to interacting with different cultures. This means that it’s not too difficult to identify candidates who have previous experience within multinational companies in Thailand. These employees tend to be less reserved and more likely to embrace a different way of doing things. They’re usually better targets because they will find it easier to adapt to an international organizational culture.

Expats / Foreign Management

In Thailand, many international companies are run by expats and you may choose to follow this strategy yourself. Some have already been working in Thailand for several years, whilst others may have been brought in from an overseas operation and are open to new opportunities. Many of the high-level positions in Thailand used to be dominated by expatriates, but there has been an emerging trend recently to start localizing the more senior-level positions as staffing standards have improved and in order to cut costs. If you are interested in hiring expats for your firm, you will find no shortage of existing talent in the market. Many have a wealth of experience around South East Asia and will be able to bring some solid market know-how and practice to the table. Having said this, expats in general tend to have a much tougher ride than their local counterparts. Why? Labor law in Thailand is notoriously strict, and hiring an expat can sometimes prove to be expensive and time consuming. Localizing positions originally held by expats is something that is becoming gradually more common, not just in Thailand, but also in other Asian countries.

Hiring Process

Many international companies choose to use the services of a recruitment agency during the set-up phase of the Thailand operation. This is because such agencies can help fill the gaps in local market knowledge and talent sourcing. It’s best to get in early and speak to recruiters well before arrival so you can proceed with operations from day one.

Typically, you will find that an average placement takes around two months end-to-end. Apart from this, most employers in Thailand require a 30-day notice period so you will have to factor this into your timeline as well. Once you’ve completed the hiring process and taken on your new members of staff, they will be subject to a 119-day probationary period. During this period either party can terminate the contract without penalty. This is useful to know because it will give you time to decide whether you’re a good match for each other and cuts out any costly severance pay penalties. This law applies to both expats and Thai nationals.

If you’re part of a multinational company that is thinking about setting up shop in Thailand, it’s important to know that you certainly won’t be short of a high standard of talent, both domestic and international. Despite some minor hiccups in the economy recently, the Thai workforce continues to develop and offers great opportunity for those considering market entry.

With the competitive market place and high employment rate, it’s advisable to start speaking to recruiters early in your planning process so you can get the ball rolling as quickly as possible. Smart Search Recruitment have years of experience in supporting large scale multinationals and their entry into the Thai market. If you have any questions about the Thai workforce or are considering Thailand for your expansion, then feel free to contact us and we will be happy to help.