The world has endured a rollercoaster ride in recent years, starting with the global pandemic, which led to disruptions, unemployment, and loss. Despite reopening for business, the global economy remains uncertain in the face of recession, the Ukraine war, a crypto market crash, high inflation, and a talent shortage. Businesses and organisations now find themselves in uncharted waters where the future remains indefinitely uncertain.

While Singapore may not be facing an immediate threat of recession, the potential impact of the prolonged downturn in economies like the US and the EU looms ominously. Despite current market trends and analysts’ arguments about a postponed US recession, there is just no guarantee that things will get better.

Inflation, wages and talent pinch in Singapore

As Singapore braces for another year of slowing economic growth, it also faces the challenge of rising inflation, which is partly driven by continuous wage increases. In 2022, the median pay for Singaporean workers, inclusive of the employer’s contribution to CPF, unexpectedly surged by eight per cent, up from the previous year’s median salary of SG$4,700 (US$3,531.44).

In addition, fresh graduates from local universities also witnessed average salary increases of SG$400 (US$300.55) to SG$4,200 (US$3,155.76) (without employer CPF contribution) in 2022 alone, marking the highest nominal wage growth in a decade.

With the current inflation rate hovering around five per cent, Singapore’s salary data could create a false impression of its economic well-being. In reality, the slowing economy is dampening employment vigour, leading to higher unemployment rates, while those employed are getting higher salaries.

With the risk of inflation continuing to loom, resident wage growth is expected to remain above pre-COVID-19 rates, potentially escalating business costs and reinforcing inflation concerns once more.

Also Read: Surviving the storm: Singapore SMEs look to global expansion as recession looms

Out of various industries, the finance and insurance sector stands out with the highest wage growth, particularly for local employees, who witnessed a more significant surge compared to foreigners. Interestingly,  this surge in wages coincides with a shortage of finance leadership positions across businesses. Data published by the Institute of Chartered Accountants revealed a concerning 36 per cent decline in accountancy applicants year-on-year between June 2021 and June 2022.

Balancing financial health for long-term success

Amid a limited talent pool, companies often resort to aggressive hiring practices to secure skilled employees. However, it is also important to exercise wisdom and foresight to avoid adverse impacts on their financial health.

The pandemic served as a harsh reminder, as tech giants that hastily expanded their workforce during the crisis had to retrench employees a year later when demand for their services did not align with assumptions.

Such retractions not only incur additional compensation costs but also tarnish a company’s reputation. Therefore, maintaining long-term sustainability and stability must remain a top priority for businesses in their pursuit of growth and success.

To maintain a delicate balance between talent acquisition and financial stability, thorough financial planning and analysis are essential. This involves considering different scenarios, cost management strategies, and the impact of wage changes on profitability. This analysis should also be robust and flexible, allowing for quick adjustments as needed.

Once a solid plan is in place, businesses can confidently execute budgets while making minor adjustments along the way. Given the current economic landscape, agility is key, and hence robust financial planning will enable businesses to set and monitor their key metrics, swiftly adapting on a month-to-month basis.

Outsourcing: A future-proofing strategy

To alleviate the impact of rising wages in Singapore, businesses can adopt outsourcing as a proven and widely used strategy. Outsourcing offers several advantages, including reduced manpower costs and the flexibility to scale resources as needed.

Also Read: Smart outsourcing means hiring partners without losing your core brand identity

Through outsourcing, businesses can also avoid the expenses associated with traditional hiring processes, such as advertising, waiting, and interviewing candidates. This approach proves especially beneficial in industries like F&B, where manpower needs can be volatile and turnover rates are high, making conventional hiring workflows impractical.

Outsourcing also offers the opportunity to enhance overall capabilities when faced with challenges in finding or retaining talent in-house. By tapping on external expertise, companies can improve service delivery and gain valuable knowledge transfer, enabling them to stay ahead in a competitive landscape, fostering innovation and growth.

While outsourcing brings many benefits, it also comes with potential challenges. Businesses must be cautious not to prioritise cost savings at the expense of quality, which can result in dissatisfied clients, leading to tangible losses as customers may discontinue their engagement. In more severe cases, the company’s reputation may be negatively impacted, even if the outsourced work was the cause of poor service quality.

To mitigate such risks, it is essential for businesses to carefully select the right tasks for outsourcing and to engage suitable partners. By doing so, they can reduce costs without compromising the quality of work, ensuring customer satisfaction while safeguarding their hard-earned reputation.

As we face an increasingly challenging future economy, planning ahead may not always guarantee a smooth journey. Nevertheless, businesses can take solace in knowing that there are effective tools and strategies available to mitigate risks, lower costs, and maintain a  sustainable talent pool.

By deploying these approaches, companies can bolster their resilience, adapt to dynamic market conditions, and position themselves for success in the face of uncertainty.

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Small businesses, which typically place a premium on efficiency and quality of service to customers, may find blockchain to be an ideal platform for financial transactions and even capital raising. While many smaller businesses may assume that only major corporations can afford to engage expensive engineers to implement cutting-edge technologies like blockchain, the reality is that a company of any size may benefit from incorporating this innovative technology into its operations.

The use of blockchain technology is not limited to internet enterprises. Blockchain technology is already being used by brick-and-mortar businesses, including cafes, gyms, nail salons, bakers, and repair shops.

Let’s have a look at some of the advantages blockchain gives business owners that are looking to grow their companies:

Uniquely distinct from prior payment forms

The first step a company may take in adopting blockchain technology is to accept cryptocurrency payments. Offering Bitcoin and other cryptocurrency payment options shows a deeper dedication to the blockchain.

Due to the fact that conventional merchant services are not prepared to deal with Bitcoin, the deployment will necessitate extensive planning and testing. Thus, in order to accept Bitcoin payments, a small business must either prepare for and budget for a digital wallet, a merchant gateway, or a combination of the two.

Also Read: Understanding the role of fintech, blockchain in transitioning to net zero

There are a number of advantages for businesses that use blockchain currency. A customer’s perception of your business could improve if you accept this type of payment. With cryptocurrency, companies may avoid intermediaries and save money by transacting with customers directly.

Since blockchain transactions are irreversible, customers who wish to request a refund must do so by getting in touch with the company directly. This helps address the problem of chargebacks, which occurs when consumers make purchases but subsequently dispute the charges on their credit cards.

Cost-effective, secure cloud storage

Every year, businesses and consumers spend more than $30 billion on cloud storage. Customers, particularly startups, can use blockchain storage solutions to safely and cheaply archive their data without sacrificing privacy or resources.

The utilisation of smart contracts

Businesses on the blockchain can employ smart contracts, which are effectively self-verifying and self-enforcing contracts. The contract is immutably stored on a distributed ledger or blockchain. Smart contracts can be seen in a variety of business contexts, including commercial leases, vendor agreements, and even employment contracts.

Thanks to smart contracts, even the smallest enterprises may enjoy a level of security that was previously out of their price range. By cutting out the traditional middleman—an attorney—a business can save money via a smart contract.

Also Read: Celebrate World Environment Day: 4 ways blockchain and ReFi are supporting a greener future 

Blockchain technology, globally Ethereum, the first platform to provide support for smart contracts, is one of the most advanced systems for making and processing them.

A funding tool for companies

Thanks to advancements in blockchain technology, startups can now consider Initial Token Offerings (ITOs) as a means of capital raising. In lieu of traditional financial intermediaries like banks, lenders, private equity firms, and crowdfunding platforms, ITOs allow tokens to be freely traded on exchanges. These tokens are similar to a stock or a cut of the profits in a conventional business.

If there is sufficient demand, the company may launch a new cryptocurrency based on the blockchain. This token can be used to invest in the company or project, or it can be used on any of the products or services it represents.

Due to the increasing interest of token investors, ITOs have become a viable alternative to traditional capital raising for businesses of all sizes. Now that these coins may be bought, sold, and traded on exchanges, the public has access to previously unavailable liquidity.

The blockchain paves the way for a new way to establish reliable relationships between parties. Instead of being perceived as a means for people to hide their activities, blockchain technology and cryptocurrencies are increasingly being acknowledged for their usefulness in the realms of privacy and security. Small businesses may be able to leverage the fact that informed customers will likely avoid spending money with a firm that uses blockchain technology as a selling point.

Businesses of all sizes would do well to start using blockchain technology immediately, whether to broaden their payment options or to reassure customers that their information is stored in an immutable record. This is a great way for business owners to increase the safety and efficiency of their operations.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic

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eFishery, the Indonesian aquatech startup that became a unicorn following a US$200 million Series D funding round early last month, will look to expand into other parts of Asia as well as the Middle East, said Co-Founder and CEO Gibran Huzaifah.

He, however, didn’t share specific details of the plans.

“We aim to expand our presence in several countries across Asia and the Middle East. We recognise the potential and value of tapping into these markets, and our expansion efforts will be geared toward capturing these opportunities,” Huzaifah said in an interview with e27. The company expects its lead investor of the latest round, UAE-based 42XFund, to help with the Middle East expansion.

In addition, eFishery has set an ambitious goal of exporting shrimp products overseas, starting with the US. According to data released by the Ministry of Marine and Fisheries in 2022, the US is the largest export destination for shrimp, accounting for 71.6 per cent of Indonesia’s total national shrimp exports. This indicates a significant market opportunity.

The aquaculture company was established in 2013 to provide an integrated aquaculture ecosystem. Its solutions include feeder technology, access to financial institutions, and a platform to sell fish and shrimp crops. It also provides disease prevention and productivity recommendations, tailored feed prescriptions, credit scoring and financing options.

eFishery also runs several initiatives to empower local farmers, including KASEF (Kampung Super Ekosistem eFishery – Village of eFishery’s Super Ecosystem) and eFishery Point.

KASEF, launched in 2022 in collaboration with various strategic partners, including the local administration, focuses on equipping farmers with the knowledge and skills to become our valued produce partners. As part of this, they can also participate in our programme KABAYAN, which provides access to financial support.

Also Read: eFishery banks US$200M, targets to engage 1M+ aquaculture ponds by 2025

eFishery Point, on the other hand, serves as a collaborative space where farmers can interact with eFishery innovations and learn about the latest technologies. Additionally, the company organises financial literacy workshops to enhance their knowledge and understanding.

The firm currently works with over 70,000 fish and shrimp farmers in 280 cities in the archipelago. In addition to exploring overseas expansion, eFishery will deepen its presence in Indonesia. According to Huzaifah, the Indonesian fisheries sector has experienced remarkable growth over the past year. As per the latest data, the industry now contributes nearly US$30 billion to its GDP (approximately 3 per cent of the total GDP).

“Indonesia is the world’s largest archipelago, consisting of 17,500 islands. Therefore, we approach our expansion one step at a time, ensuring effective implementation and support across different regions,” he noted.

He also revealed that eFishery achieved positive EBITDA for two consecutive years. It distributed a substantial amount of its farmers’ harvest, totalling 13,000 tons, across various regions of Indonesia in 2021. Additionally, the company’s domestic transactions reached 420 billion Indonesian rupiahs (US$27.6 million), which includes shrimp exports within the same year.

“We consistently try to sustain a healthy business cycle in our existing super-ecosystem for fish and shrimp farming nationwide through various initiatives. Our goal is to grow together with farmers within our super-ecosystem by providing support on what they need the most, such as digital fish and shrimp farming management, access to micro-financing, and assurance in the distribution flow of their harvest.

When launched in 2013, eFishery was the only aquaculture startup in Indonesia. However, the landscape has since evolved, and there are now over 50 startups operating within the aquaculture and fishery industries, each with its unique focus.

“The emergence of numerous startups signifies a growing concern and interest in the industry, further motivating us to make a positive impact,” he said. “Our missions and core purpose remain steadfast: to meet global food demands through aquaculture, offer affordable technological solutions to fundamental problems, and foster an inclusive digital economy that reduces inequality,” he explained.

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From January to May 2023, WasteX, a climate-tech company operating in the Philippines and Indonesia, implemented the biochar solution that it has produced in a poultry farm in West Java. Collaborating with agritech startup Pitik Digital Indonesia, the project aims to examine how biochar–a charcoal-like and carbon-rich substance derived from biomass–can boost the performance of the poultry industry and help achieve sustainable farming techniques.

The same solution has been implemented by WasteX in a Cavite poultry farm in the Philippines and resulted in positive reception from various government institutions.

What is the biochar, and why does it sound so promising? Biochar is produced from rice husk and poultry litter using WasteX’s proprietary equipment at one of Pitik’s farms. It is then incorporated into the farm’s operations in two ways: as a bedding additive of up to 10 per cent of the total bedding and as a feed supplement of up to two per cent of the feed.

In a press statement, WasteX says that the supplementation of bedding with up to 10 per cent biochar led to substantial improvements in the farm’s broiler chicken production with a 25 per cent reduction in chicken mortality rate and a 30 per cent decrease in overall bedding use.

It also helps the farm achieve the highest-ever recorded value in its Performance Index with a slight decrease in the feed conversion ratio or FCR. Apart from that, the use of biochar also helps with a “near-complete” eradication of E. coli and guarantees carbon credits to its clients for the entire biochar production and application.

Also Read: TRIREC Partner Mike Lim: Interest in climate tech investments remains buoyant despite challenges

Why biochar is the way to go

WasteX is the result of the Wavemaker Impact venture-building process. In an email interview with e27, Founder and CEO Pawel Kuznicki explains how the project came to be.

“We were looking for untapped opportunities where we could have the biggest financial and carbon impact. We realised that biochar is the way to go – that it is proven technology but requires commercialisation. Then we realised that potential agricultural stakeholders require a complete solution so that they would adopt it,” he explains.

“That’s how we decided to develop our end-to-end solution inclusive of our own proprietary equipment, full implementation with agronomy expertise, and carbon credits facilitation. We embarked on initial partners in pilot projects (farms and agricultural producers from the Philippines, Indonesia and Thailand) while we were perfecting our solution. With these successful initial projects, we recently started commercial implementations with a much-improved product, processes and proven benefits.”

Biochar itself has plenty of potential applications, ranging from agriculture to cement manufacturing to water filtration. But WasteX focuses on its implementation in crop farming, including cassava, cacao and vegetables.

“We offer an end-an-end that is inclusive of our proprietary equipment, full implementation on the farm, support with biochar application in farming, a digital app to monitor to progress and optimise the application, and carbon credits facilitation where we guarantee US$50 per ton biochar to farms. It is already a fairly holistic solution where we try to maximise benefits for our clients,” Kuznicki says.

Also Read: Demystifying the financial impacts of climate change with Intensel

As a company, WasteX has three sources of revenue: Equipment sales, implementation fees, and revenue sharing on carbon credits.

“We have a multi-channel acquisition strategy that includes outbound sales, digital and offline marketing, working with independent agents and partnerships. The benefits to farms are quite clear and convincing, so the major challenge is the investment required on the farm’s side. We address it by offering flexible payment plans,” Kuznicki says.

Having raised a total of US$775,000 from Wavemaker Impact and Norinchukin Innovation Fund, WasteX is run by a team of 12 splits between the Philippines and Indonesia.

“Currently, we focus on growing these two markets, but we have got client inquiries from Thailand, Australia or Vietnam, among others,” Kuznicki says.

“But we believe that Indonesia and the Philippines are huge big opportunities for our business that we want to grow the expertise and presence there so that we can provide to our clients top-notch on-the-ground service.”

In the near future, the company wants to focus on product development and customer acquisition.

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Image Credit: WasteX

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Indonesia-based remittance startup Transfez introduced a new product called Jack, a service that focuses on providing a comprehensive financial management platform for finance teams in corporations.

Jack and Transfez Co-Founder & CEO Edo Windratno told DailySocial that the idea started off just as Transfez began operating. The company learned that many of its users came from the MSME segment, using its solutions to pay invoices from overseas vendors.

“Those days, legacy players in the market required customers to visit branch offices to do remittance. That was how we learned that there is a demand to launch Transfez for Business to help corporates with the remittance, says Windratno.

As time went by, the startup also learned that remittance was only a small chunk of the financial management problems that corporations faced. Apart from that, when it comes to the remittance business, Indonesia is still considered a “recipient country” instead of a “sender country”. This is related to the high number of Indonesian migrant workers living abroad and sending money to their families at home.

This was why, in order for remittance businesses to grow, they needed to expand into the B2B segment–an issue that Transfez also dealt with.

The company then validated the question in the field until it had enough conviction to set up a separate brand entity. It ended with the launch of Transfez for Business nine months ago.

Also Read: Co-founders inject US$48M into Lightnet to grow its blockchain-powered global remittance solutions

“There is already a significant difference between Jack and Transfez for Business in terms of the features they offer. Apart from that, Transfez is also known as a remittance brand. This is why we used Jack for a fresh start.”

Windratno stresses that as a brand, Jack and Transfez are two separate entities under one corporate entity. These two brands have different focuses. Transfez focuses on overseas remittance for retailers, while Jack focuses on registered corporations with a more complex solution.

In terms of milestones, Transfez claimed to have achieved profitability due to its health unit economics and ability to acquire users organically. Its users consist mostly of expatriate, students and their parents, and import companies.

Let’s talk about Jack

Windratno further explains that Jack was developed as a response to the various challenges faced by corporations in Indonesia, including limited access to corporate credit cards and inefficient finance procedures. By using AI technology, Jack aims to revolute the financial process and increase productivity by 10 times, without neglecting the privacy and data security aspects.

Jack provides comprehensive financial solutions that include Corporate Cards, Reimbursement, Bill Payment, Local Transfer, and International Transfers. The platform helps businesses solve the problem of decentralisation as a result of using services from different platforms and vendors by offering a holistic solution to improve quality control based on real-time data and a decentralised system.

With Jack, business owners and finance teams have full control of company expenses, increasing accountability through a real-time tracking system, automated payments, cutting down transaction fees, and freeing the workload of the finance team. This is completed with a workflow that is accessible through a mobile app, helping users to manage their finance in a flexible manner.

“What sets us apart is the integration between submission, approval, and payment process. We are tackling the existing problem of financial software disintegration … the flow is more manageable, and the platform will disburse the fund as soon as there is approval.”

Windratno explains that to reimburse bills, the finance team only needs to ask employees to take pictures of the invoices and submit to the platform for approval. The Jack system is also customisable, allowing approval for every submission.

“When the last person that has been appointed has been approved to reimburse, our engine can start the transfer process. There are also other features that we are developing to help cut down the finance team’s workload.”

Since the launch of its beta platform through the Transfez for Business, Jack has received positive responses from various clients, from Visinema, Adhimix Precast Indonesia, Impactto, to Love, Bonito.

It has helped clients to cut work time down to 7,800 hours and cut down transaction fees by 60 per cent at around IDR30 billion annually.

The Jack solution is also sector-agnostic, meaning that it is suitable for companies in every business vertical with 10-250 employees. The company expects to onboard more clients in the future.

A similar solution is offered by Singapore-based startup Aspire.

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This article was written in Bahasa Indonesia by Marsya Nabila for DailySocial. English translation by e27.

Image Credit: Jack

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