More workers laid off in 2014 amid economic restructuring

Highest rate since 2009; PMETs made up 51% of 12,930 who lost jobs last year
By Joanna Seow, The Straits Times, 24 Apr 2015

THE ongoing restructuring of the economy continued to take its toll on the job market last year, displacing more workers, particularly higher-skilled ones.

A total of 12,930 people lost their jobs last year, up from 11,560 in 2013, and the highest since the recession in 2009.

Of these, professionals, managers, executives and technicians (PMETs) made up 51 per cent, a Ministry of Manpower (MOM) report showed yesterday.

Older workers - in their 40s and above - made up 58 per cent of resident PMETs laid off.

Observers said measures such as the Fair Consideration Framework to reduce the reliance on foreign labour may explain in part the rise in redundancies.

Relatively speaking, more non-residents lost their jobs last year, while fewer Singapore citizens and permanent residents did, compared with 2013.

"Foreign manpower tightening in the past few years is essentially to encourage companies to cut headcount," said DBS economist Irvin Seah.

While more workers were displaced, nearly seven in 10 residents who lost their jobs in the first nine months of last year managed to find new jobs by December.

But PMETs and degree-holders lagged behind; their rates of re-entry into employment were only 63 per cent and 61 per cent, respectively.

The job re-entry rate of the degree-holders slipped from the previous year, while all other educational groups saw improvements, "reflecting the strong competition for jobs among degree-holders", said MOM.

The majority of affected workers overall came from the service sector, which had employed 56 per cent of those who were asked to go.

Companies in the sector laid off more workers last year, and listed business restructuring for greater work efficiency as the top reason for letting staff go.

The construction sector continued to be plagued by poor business or business failure, reported companies, which led to more layoffs last year than in 2013.

But a bright spot was that the number of layoffs in the manufacturing sector fell by over 20 per cent, from 5,000 in 2013 to 3,970 last year.

Experts noted that PMETs' higher share of redundancies could be explained partly by the fact they made up about 53 per cent of the resident workforce.

"The numbers tally with the profile of the workforce, which shows that PMETs are equally if not more vulnerable to redundancies as rank-and-file workers," said labour Member of Parliament Patrick Tay.

Workers at higher ranks might find it harder to adjust to jobs in different industries, experts said.

OCBC economist Selena Ling noted that workers laid off from the professional services, information and communications, and manufacturing industries - which employ a sizeable group of PMETs - tended to switch industries when securing a new job.

"PMETs might be resistant to switching industries as their experience would be wasted, so being forced to change industry suggests that these industries are in a state of flux," she said.

Do more to help older PMETs

RESPONSIBILITY for the increase in the number of retrenchments last year has been placed on ongoing economic restructuring in Singapore ("More workers laid off amid economic restructuring"; yesterday).

Since economic restructuring refers to the phenomenon of urban areas shifting from a manufacturing to a service-sector economic base, which directly affects employment, why is the likelihood of redundancy among professionals, managers, executives and technicians (PMETs) higher than among blue-collar construction, production and related workers?

PMETs accounted for 51 per cent of the layoffs last year.

Even among those made redundant, the rate of re-entry into employment is far slower for white-collar workers.

Among those who found new jobs, a large proportion resumed work in a different industry, suggesting that their previous employment was in a sunset industry, or that a huge number of these PMETs end up underemployed as insurance or property agents, private tutors, security guards or taxi drivers, thereby competing with a huge pool of non-graduates for employment.

The group of mostly university-educated Singaporeans continue to lose their livelihood at an alarming rate.

In spite of tighter restrictions introduced last year to control the influx of foreign PMETs, the retrenchment rate of white-collar citizens remains high, as many companies still prefer hiring foreigners, owing to savings in cost.

The long-term consequence of structural unemployment, especially with tens of thousands of older local PMETs losing their skills and employability, is the eventual weakening of our economy.

Older Singaporean employees have discovered that existing guidelines and incentives to companies are far too inadequate and ineffective. Retrenched workers with the required experience, impressive track record and credentials can send out hundreds of job applications, attend numerous interviews, and still draw a blank, owing to nothing except their age.

The Tripartite Alliance for Fair and Progressive Employment Practices may have set out principles of fair employment practices for adoption by employers.

However, in the absence of legislation, such an approach falls short of getting firms to keep or re-employ their older workers.

Edmund Khoo Kim Hock
ST Forum, 25 Apr 2015

More help for displaced PMETs

WE THANK Mr Edmund Khoo Kim Hock for his feedback ("Do more to help older PMETs"; last Saturday).

In a small economy that is inevitably exposed to competition from around the world, and with individual businesses themselves subject to constant contest in the global marketplace, a certain amount of layoffs will happen regularly.

What is critical, and what we must be focused on, is enabling workers to find new jobs when they are laid off.

Fortunately, despite layoffs, the unemployment rate for Singaporean professionals, managers, executives and technicians (PMETs) has stayed low at 2.9 per cent, with the majority able to re-enter the workforce quickly.

The long-term unemployment rate, reflecting those unable to get a job for more than six months, is even lower at 0.7 per cent.

These are among the lowest rates internationally.

However, the Government is stepping up its efforts to help PMETs who become redundant, by matching them to good jobs available in the economy.

This effort is more important now as our economy restructures towards being driven by deeper skills and expertise, and as more efficient firms displace others.

It will often mean equipping mid-career Singaporeans with new skills so that they can take on new jobs.

Last year, we substantially increased the support given to employers who hire mature PMETs in professional conversion programmes, to 90 per cent of basic monthly salary during the period of training.

Last month, we launched the P-Max programme, which supports the entry of PMETs into suitable jobs in our small and medium-sized enterprises (SMEs).

We encourage employers to take full advantage of these schemes.

Employers should look out for mid-career Singaporeans who are temporarily dislocated, help them to get back into a good job, retrain them where necessary, and enable them to contribute their worth.

But beyond matching displaced workers to today's jobs, the SkillsFuture initiative will help Singaporeans stay relevant throughout their careers.

It includes a special focus on mid-career Singaporeans.

Education and training subsidies for all Singaporeans aged 40 and above will be enhanced to a minimum of 90 per cent of training costs for courses funded by the Education Ministry and the Workforce Development Agency.

We will also facilitate learning throughout one's career through modular courses, which will help individuals balance family, career and learning.

We must continue with our restructuring efforts so that our economy can remain vibrant and competitive, to secure jobs today, but also provide full opportunity for Singaporeans to have good careers tomorrow.

Adrian Chua
Divisional Director
Manpower Planning and Policy Division
Ministry of Manpower
ST Forum, 30 Apr 2015