Thursday 20 November 2014

Raise rehiring age by Budget 2016: Halimah

But move hinges on outcome of govt incentives for companies, she says
By Rachel Au-Yong, The Straits Times, 19 Nov 2014

MADAM Halimah Yacob, who heads the senior advocacy group in the People's Action Party, wants the law on raising the re-employment age from 65 to 67 to kick in by Budget 2016.

But this move would hinge on the outcome of the incentives the Government plans to give companies from next year to coax them into raising the age voluntarily, the former top union leader, who is now Speaker of Parliament, told The Straits Times yesterday.

Madam Halimah was elaborating on a position paper that the PAP Seniors Group (PAP.SG) submitted yesterday to the Ministry of Manpower (MOM), calling for a quickening in the pace of implementation of the law.

"It should have been done yesterday, but companies would have raised a hue and cry," she said.

"Changing the law by the next Budget is also out, because that's when the incentives will be announced, so I'm hoping it will be legislated by Budget 2016."

She added: "One year is as good as any to assess if the incentives work."

The national Budget is typically unveiled in February and takes effect on April 1.

The PAP.SG, in arguing for legislation, believes the incentives will not be as effective as the law in getting companies, especially those in the non-unionised sector where most people are employed, to raise the rehiring age to 67.

It pointed to how companies were reluctant to raise the retirement age from 55 to 60 before the law was changed.

Only 10 per cent of them did so in the two years before the Retirement Age Act was passed in 1993. The Government also set 2003 as the target for having people work until age 67.

Despite the delay, the MOM is taking the gentler approach, though existing laws give Manpower Minister Tan Chuan-Jin the power to raise the re-employment age to 67 without having to change the law via Parliament.

When contacted, Singapore National Employers Federation executive director Koh Juan Kiat said more time is needed to ensure a smooth transition.

"Let's see how the promotional efforts work out, so companies can develop a human resource policy over the long term to accommodate an ageing workforce."

Beyond the law, the PAP.SG gave other ideas on how to encourage companies to raise the rehiring age earlier.

These include having the ministry urge employers to use existing grants to rehire older staff, and to ensure better use of training opportunities for these workers.

The training participation rate of workers aged 50 to 64 is 23 per cent, compared with 40 per cent for those younger than 40, the PAP.SG noted.

The group also suggested giving more incentives to companies that raise their rehiring age earlier than others.

In response, the MOM said it will take into account the PAP.SG's views.

"The Government is committed to helping our seniors work as long as they are able and are willing to," its spokesman said.

"The promotional approach was the result of careful deliberation and balancing the concerns of both employers and workers. This was with a view of maintaining the long-term employability of our older workforce," she added.

In a separate note to the PAP's central executive committee, the party's highest decision-making body, the PAP.SG asked that free lifetime membership be given to the party's pioneers.

These are people aged 65 and older and who have been members for at least 25 years. The membership fee is $9 a year.

The lifetime membership will signal to younger members the importance of the veterans, given their experience as community volunteers, the group said.

Bosses open to upping re-hiring age
This despite business groups warning that legislation can raise costs
By Rachel Au-Yong, The Straits Times, 21 Nov 2014

WHILE business groups warn that legislation can raise costs, companies say they are ready to raise the re-employment age from 65 to 67 in early 2016.

"I don't see any big issue from raising the age by another two years. It's not that much of a difference, especially in a tight labour market,'' said Mr Edlan Chua, who heads restaurant chain Paradise Group.

Mr Chua's comments reflect the views of almost all the 15 companies interviewed on a call to the Government to make it a legal requirement for companies to raise the re-employment age to 67 by the 2016 national Budget.

It was made this week by MP Halimah Yacob, head of the People's Action Party Seniors Group (PAP.SG) and Speaker of Parliament.

Bosses in sectors ranging from home renovation to medical research took her call in their stride, saying that it would send a strong signal that older workers with skills and expertise are needed.

Said Mr Soh Chee Keong, chief executive of facilities management firm Synergy FM International: "Nowadays, it's hard to get skilled electricians and carpenters, so if the law encourages them to stay on and they can do the work, why not?"

But employer groups fear that making it the law could lower productivity.

"Between your early 60s and late 60s, there can be a difference in the amount and quality of work you put in," said Mr Kurt Wee, president of the Association of Small and Medium Enterprises (Asme).

Madam Halimah wants the Government to hasten the pace in legislating the re-employment age, a point made in the position paper the PAP.SG submitted on Tuesday to the Ministry of Manpower (MOM).

The group believes government incentives to coax companies to raise the re-employment age will not be as effective as legislation, especially among companies in the non-unionised sector where most people are employed.

These incentives will be spelt out next year.

Mr Wee said he preferred to see how this "promotional approach" turned out, and added that 2017 or 2018 would be a "more reasonable'' deadline for implementing the law.

The reason is that companies are grappling with issues arising from the 2012 law that requires them to re-employ eligible workers till 65 after the retirement age of 62.

The issues include integrating an inter-generational workforce. "It takes time for the ground to return feedback to the policymakers," said Mr Wee.

Singapore Business Federation chief operating officer Victor Tay said legislation may also make business practices more rigid and, in a recession, could cause a company to collapse. "Legislation is hard to reverse - voluntary measures are more efficient."

Singapore National Employers Federation executive director Koh Jun Kiat said rehiring may also affect renewal plans.

Workers' pay forms a major portion of a company's costs. Despite the option to reduce the pay of re-employed staff, a MOM survey highlighted in Parliament shows two in three workers who turned 62 last year did not suffer pay cuts when re-hired.

Companies, especially those shunned by young workers, often have to rely on older workers. Recycling company Wah & Hua, for instance, said more than one-third of its workers are older than 55.

But most employers said age is unlikely to affect their staff's productivity. Said Ms Fion Ng, general manager of renovation firm Grandwork Interior: "Our older workers often take less medical leave than our younger staff."

Implications of rehiring older workers

THE call to raise the rehiring age from 65 to 67 is loud and clear, and getting louder ("Raise rehiring age by Budget 2016: Halimah"; Wednesday).

Before any such move, however, we need to carefully consider the cost to employers, the advancement prospects of younger employees, and the productivity and value-add of the rehired workers.

Contrary to what some may believe, age does reduce one's mental alertness and robustness, attention span, ability and willingness to embrace new technologies and change, and productivity.

Even though older workers have more experience, not all of it may be applicable as the business environment and practices are ever-changing. In fact, younger workers may be more adept at handling changes and they learn faster.

Thus, jobs for rehired workers need to be reconfigured.

Rehiring older workers can be expensive, especially for those in senior management whose jobs can and should be given to promising younger employees, thereby ensuring rejuvenation and satiating the aspirations of the young. This also helps in staff retention as younger employees will see the benefits of staying put.

Rehired older workers must be prepared to pass the baton to their younger colleagues and take a pay cut, recognising the fact that they will be relatively less efficient, despite training.

In this way, they will not deprive younger employees of career advancement opportunities and, at the same time, not be a cost burden to their employers. Employers will then be more willing to rehire them.

Lawrence Loh Kiah Muan
ST Forum, 21 Nov 2014


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