Saturday, 26 April 2014

Jobless rate inches up amid tight labour market

Unemployment still low at 2.1% but job growth is slowest since 2011
By Joanna Seow, The Straits Times, 1 May 2014

THE job scene here is off to a tepid start this year, with the highest jobless rate and lowest increase in new jobs filled since 2011.

While unemployment remained low at 2.1 per cent in the first quarter, this seasonally adjusted rate was up from 1.8 per cent in the previous quarter.

It was coupled with the slowest employment growth since mid-2011, with some 24,900 jobs added, according to preliminary figures released yesterday by the Manpower Ministry.

In the same period last year, the number of new jobs added was 28,900.

This worried some experts, especially as the uptick in unemployment came amid a tight labour market.

"You would expect employers to be grabbing people off the street," said labour economist Randolph Tan from SIM University. "This could be a reality check about the mismatch of workers' skills with those required by vacancies."

DBS economist Irvin Seah cautioned that "it's a bit premature to get jumpy about this", but added that unemployment and job growth should be monitored going forward as the local economy is transformed.

The unemployment rate for Singapore citizens was 3 per cent last quarter, up from 2.8 per cent, while that for residents - that is, Singapore citizens and permanent residents - was 2.9 per cent, up from 2.7 per cent.

In comparison, economists say the slowing job growth is less of an issue and comparable to last year after discounting the construction sector, which is often volatile because of project schedules.

The construction workforce slowed its growth to 4,000, down from 7,600 in the previous quarter and 8,400 last year.

Job growth continued to be driven by the service sector, which added 21,900 jobs, higher than the growth of 21,100 in the first quarter of last year. It was lower than the 31,800 jobs added in the previous three months, but the fourth quarter typically sees more people employed in the service sector due to the festive period. In contrast, the manufacturing sector lost 1,200 jobs last quarter, which was the case in the same period last year.

Economists pointed to poor output in industries like pharmaceuticals and electronics and the falling competitiveness of Singapore's exports as possible reasons for the loss.

But despite overall unemployment creeping up, fewer people lost their jobs last quarter. Some 2,900 workers were laid off, down from 3,660 affected in the preceding quarter.

Associate Professor Tan said more people could be joining the labour force without being in jobs yet, like fresh graduates.

Layoffs were higher compared with the 2,120 during the same period last year.

CIMB economist Song Seng Wun noted that this was likely reflective of the ongoing economic restructuring and the uneven recovery of the global economy.

Redundancy, unemployment remain low in 2013: MOM
By Sara Grosse, Channel NewsAsia, 24 Apr 2014

A total of 11,560 workers were laid off last year, slightly higher than the 11,010 in 2012, said the Ministry of Manpower (MOM) in its "Redundancy and Re-entry into Employment, 2013" report released on Thursday.

This works out to 5.8 workers per 1,000 employees, unchanged from 2012.

Mr Stephen Lee, president of the Singapore National Employers Federation, said: "It is still a very manageable figure. And I think some redundancy, restructuring type of turnover is actually healthy for the economy."

The top reason for redundancy was the restructuring of business processes for greater work efficiency, affecting 40 per cent of the workers laid off in 2013, up from 37 per cent in 2012.

High costs and reorganisation of businesses were the other key reasons cited.

Observers said it is possible for companies to restructure without making employees redundant.

David Ang, director of capability and business development at Human Capital Singapore, said: "For example, it might be a situation that the company downsizes in Singapore, retains all the manpower for the HQ in Singapore and provide services out to the region.

"The excess employees who are in operation might be useful in terms of being re-deployed to overseas operations, to see how they can train up and build up the capability in the overseas entities."

In a press release outlining the findings of the report, it was also noted that professionals, managers, executives and technicians (PMETs) were more vulnerable to redundancy, with 7.3 made redundant for every 1,000 PMETs, compared to production and related workers (5.7 per 1,000) and clerical, sales and service workers (2.8 per 1,000).

Nonetheless, the unemployment rate of PMETs remained lower than other occupations.

The number of residents laid off from PMET positions was also "not large" at 4,940.

66% of residents made redundant in the first three quarters of 2013 re-entered employment by December 2013, within 12 months of redundancy. 

This was slightly lower than the rate in 2012, due to PMETs spending more time seeking jobs.

Patrick Tay, assistant secretary-general of NTUC, said: "I think mainly because they will take time to pick up new skills or look for a job that matches their skills, qualifications, salary expectations."

Mr Ang advises younger PMETs to be more flexible and older ones to adjust their salary expectations.

There was, however, an improvement in the last three quarters of the year, with the rate of re-entry into employment within six months of redundancy rising from 49 per cent in March 2013 to 59 per cent in December 2013. 

More white-collar workers retrenched
PMETs made up more than half of those laid off last year: MOM
By Joanna Seow, The Straits Times, 25 Apr 2014

MORE workers are being laid off, and a growing proportion of them are higher-skilled.

For the second year in a row, professionals, managers, executives and technicians (PMETs) were most at risk of losing their jobs, a Manpower Ministry (MOM) report showed yesterday.

Overall, layoffs rose 5 per cent last year to 11,560, up from 11,010 a year earlier, amid continued economic restructuring. As the pool of employees grew, there was no change in the rate of layoffs - it affected 5.8 workers per 1,000 employees in both years.

However, 7.3 in every 1,000 PMETs were affected last year, with 6,430 asked to go.

They made up 56 per cent of those who lost their jobs last year, a proportion that has been on the rise since 2010, when they comprised only 35 per cent.

Experts said this could be because economic restructuring has been moving up the value chain.

"Most of the low-lying fruit of capital or technology investments to reap productivity have been picked," said OCBC economist Selena Ling.

PMETs in the manufacturing, information and communications and financial services industries were most at risk, the MOM report revealed.

Among residents, PMETs formed 66 per cent of those laid off last year, disproportionately higher than their share of the resident workforce at 52 per cent.

The MOM report also noted that both the manufacturing and construction sectors let more workers go last year than in 2012.

High operating and labour costs affected the manufacturing industry, while poor business or business failure not due to recession was the top reason for layoffs in construction, amid a slowdown in building activities.

On the other hand, fewer people were let go in the service sector last year than in 2012,

with restructuring of business processes to become more efficient as the top reason for layoffs.

The overall rate of re-entry into employment dipped for the second time in two years.

Some 66 per cent of residents laid off in the first three quarters of last year were employed by December, compared with 68 per cent in the previous year.

MOM said that this was weighed down by PMETs, "who take longer to secure re-entry into employment, as they spend more time seeking jobs that match their skills, qualifications and salary expectations".

Also, older residents aged 50 and up had the hardest time getting back into jobs last year, compared with those in other age groups.

Only 55 per cent were able to find another job within 12 months of being laid off, down from 61 per cent the year before.

Nonetheless, experts pointed to the low overall unemployment rate as a sign that those who lose their jobs are likely to find employment in other sectors.

Speaking on the sidelines of an MOM seminar, Singapore National Employers Federation president Stephen Lee said the job market is still tight, "so the PMEs should be able to find work, provided they are not too choosy".

"The job offer and job seeker ratio is still quite healthy in the favour of job seekers," he added.

But in the years to come, the number of higher-skilled jobs may not keep up with the huge supply of graduates, said Bank of America Merrill Lynch economist Chua Hak Bin.

More re-skilling and job placements may be needed for the mid-level white-collar workers, particularly in the infocomms and financial services industries, said OCBC's Ms Ling.

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