ASW CONSULTING - From Skills Gaps to Growth: Upskilling Southeast Asia’s Workforce for 2026

Workforce transformation in Southeast Asia this 2026 has become critical. Rapid tech innovations, geopolitical uncertainty, climate pressures, and economic shifts are reshaping the region’s business landscape. According to the World Economic Forum’s Future of Jobs Report 2025, employers in Southeast Asia are more actively addressing skills gaps than global peers, focusing on upskilling current employees and hiring new talent to meet current and emerging business needs.

Regional Talent Trends and Opportunities

Based on the Future of Jobs Report 2025, 96% of employers in Southeast Asia are prioritising upskilling, compared to 85% globally, and 86% are hiring staff with new skills—well above the global average of 70%. Internal job transitions are gaining focus in Indonesia, Malaysia, and the Philippines, with organisations recognising that redeploying skilled employees internally can be faster and more cost-effective than external hiring.

Skills shortages remain a top challenge. Employers in Singapore and Vietnam report difficulties finding qualified talent, highlighting the need for public policy reform to expand talent pools and modernise labour frameworks.

Country-Specific Workforce Strategies

The World Economic Forum’s Future of Jobs Report 2025 mentions the following strategies that employers in these Southeast Asian countries are implementing to manage skills gaps and retention challenges.

Vietnam: Over 60% of firms cite skills gaps as a barrier, while 55% note inadequate data infrastructure. Solutions focus on public funding for reskilling, flexible hiring practices, and adjustments to immigration and retirement policies.

Thailand: Attracting talent is challenging, with 62% of talent acquisition specialists in Thailand struggling to fill industry roles. Thai firms increasingly implement diversity, equity, and inclusion initiatives, as well as employee benefits like childcare support. Flexible labour policies and reskilling funding are key to expanding the talent base.

The Philippines and Malaysia: In the Philippines, 68% of workers need training to meet evolving skill demands, but only 38% have completed it. Malaysian employers plan to co-fund 32% of reskilling initiatives, double the global average, and increasingly recognise short courses and online certifications, moving away from traditional degree-based recruitment.

Indonesia: Digitalisation will drive labour-market change by 2030, impacting 83% of businesses. Employers are shifting staff from declining roles to growth areas, with AI and sustainability specialists leading, while administrative positions decline.

Singapore: Geoeconomic fragmentation is expected to affect 64% of businesses. Nearly all firms prioritise upskilling and hiring for emerging skills, though 58% still favour university degrees in hiring.

Strategic Recommendations for Southeast Asian Businesses

Research cited in People Matters shows employees increasingly expect employers to invest in long-term development, particularly as AI and automation reshape roles. According to the World Economic Forum 2025 report, more than half of employees believe their skills will change significantly within five years due to AI and big data.

Skills development is critical to talent retention. PwC’s Asia Pacific Workforce Hopes and Fears Survey 2024 notes that 78% of employees increasingly view learning opportunities as a deciding factor in whether they stay or leave an organisation.

To build a future-ready workforce, businesses should consider the following strategies:

1. Upskill and Reskill for Workforce Agility

Upskilling enhances current employee capabilities for evolving roles, while reskilling prepares staff for new positions as automation or market shifts occur. Southeast Asian businesses can leverage internal mobility to redeploy talent efficiently, reducing costs and retaining knowledge.

2. Recognise Diverse Credentials

Southeast Asia’s job market is increasingly skills-driven, moving beyond strict degree requirements. Acknowledging diversity of credentials broadens the talent pool, fills skills gaps faster, and supports continuous learning, aligning with workers’ growing demand for verifiable skill benchmarks.

3. Develop Human-Centric Skills

Soft skills like communication, teamwork, leadership, and adaptability remain critical, especially as AI and automation handle routine tasks. HR Asia notes that communication is a key gap in Southeast Asia. Investing in human-centric skills equips teams to collaborate, solve problems creatively, and make effective decisions in a rapidly evolving environment.

4. Foster Continuous Learning

Upskilling must be ongoing, not a one-off. Embedding learning into daily workflows through mentorship, digital platforms, and partnerships ensures continuous growth. People Matters highlights that employees expect ongoing support for skill development, especially in AI and data roles. Incentives like certifications and promotions reinforce engagement and learning alignment.

5. Connect with Talent Acquisition Experts

Finding skilled talent in Southeast Asia remains challenging. Working with a reputable recruitment agency in Thailand and Vietnam, for example, can give you access to qualified candidates in the region and provide support for your workforce planning. They must also have a deep understanding of local regulations, labour mobility, and industry trends to help your business scale efficiently, retain talent, and recommend upskilling initiatives.

ASW Consulting: Your Trusted Recruitment Partner in Southeast Asia

For businesses seeking to implement these strategies, having a reliable recruitment company in Southeast Asia on your side can be your best asset. ASW Consulting, our headhunting company in Thailand and Vietnam, specialises in helping organisations attract, retain, and develop skilled employees.

Our talent acquisition consultants in Thailand and Vietnam provide tailored solutions for your business needs. By working with our headhunting firms in Thailand and Vietnam, your business can access a robust talent pipeline, implement effective upskilling initiatives, and remain competitive in a rapidly evolving market.

Contact us today to discover how our expertise as a recruitment company in Thailand and Vietnam can help your organisation develop its workforce, close critical skills gaps, and position your business for success in 2026 and beyond.