Thursday 16 March 2017

Tough job market amid brighter signs for economy in 2017

Those out of work taking longer to find jobs, though 2017 economy expected to grow 2.3%
By Joanna Seow and Wong Wei Han, The Straits Times, 16 Mar 2017

There are good prospects flagged for the economy, but less so for the job market, as Singapore enters a tricky phase of growth.

The slowing economy has been taking its toll on job seekers, with those out of work taking longer to find jobs, data released by the Ministry of Manpower (MOM) yesterday showed. Nor is the job market expected to get any easier this year.

In contrast, private-sector economists are now far more bullish about Singapore's economy than they were three months ago.

The local economy is expected to expand 2.3 per cent this year, according to the latest quarterly survey of economists by the Monetary Authority of Singapore (MAS). That is a healthier rate than the 1.5 per cent median forecast in December.

The 23 economists responding to the latest survey see manufacturing powering ahead by 4.5 per cent this year, far more optimistic than their 1.1 per cent estimate in December.

This, however, will not necessarily translate into more jobs. "While the near-term growth outlook for manufacturing has improved, the hiring outlook for 2017 remains cautious, as performance is likely to be uneven across clusters," MOM said.

Its data showed that employment growth slowed last year and the struggle to find new jobs was even harder for older workers, degree holders and PMETs (professionals, managers, executives and technicians) who get laid off. In all, some 19,170 people were laid off last year. Around half managed to find new jobs, but the rate of re-entry was lowest for those aged 50 or older (40 per cent), degree holders (42 per cent) and PMETs (44 per cent).

The first two groups were also at the receiving end of the rising long-term unemployment rate - the proportion of residents who could not find a job for 25 weeks or more.

This has risen to 0.8 per cent - the highest in seven years - and was even higher, at 1 per cent, for those aged 50 and older, and for those with a degree.

There were fewer job vacancies to go around too - around 77 for every 100 job seekers. The total number of vacancies in December fell to 47,600 - a four-year low.

Total employment expanded by 8,600 workers last year, excluding maids, and the ministry has indicated that such modest expansion could be the norm. It does not expect a return to the early part of the decade, when 120,000 workers were added on average each year.

One bright spot was that productivity rose by 1.4 per cent last year, up from 1 per cent in 2015.

"Businesses should press on with transformation efforts so that they can continue to grow in a... manpower-lean environment," said MOM.

Growth could indeed be on the cards. DBS economist Irvin Seah has forecast a strong 2.8 per cent full-year growth for the economy.

"We are seeing strength in the United States recovery and stabilisation in the Chinese economy. This has manifested in the significantly stronger manufacturing performance, particularly in the electronics cluster," he told The Straits Times.

Singapore's trade figures have turned positive. In January, total non-oil domestic exports surged 8.6 per cent, backing up two previous months of growth. Electronics exports rose by 6.1 per cent, accelerating from December's 5.7 per cent.

Export momentum is set to continue, with the latest MAS survey showing a median forecast of 6.1 per cent growth - well above the 0.3 per cent previous estimate.

But economists still expect the labour market pains to stretch on.

"With unemployment partly structural, improvements in external demand - even if sustained - may take longer to filter through to the jobs market," said Citi economist Kit Wei Zheng.

PMETs 'need to embrace changes, train for new jobs'
They comprise 72% of local residents made redundant, more than their share of 55% of resident workforce
By Joanna Seow, The Straits Times, 16 Mar 2017

On the last day of 2015, before he was to greet the new year, Mr Nicholas Tan, 48, lost his job.

His company, an electronics multinational, had shut down its Singapore operations, causing about 300 people to be jobless, including Mr Tan, who was the marketing manager for the Asia-Pacific region.

Initially, he looked for a similar role in the same industry, but months of failure forced him to lower his expectations to include executive-level roles as well.

"I thought, with my experience, I could get a job easily, but I was wrong. After four months, I got more and more demoralised."

He sent out about 70 job applications but received only two replies. He did not get the jobs after the interviews.

Finally, in May, he landed a job as a regional product sales manager at a local electronics firm - on the recommendation of a friend.

He struggled to adapt to a smaller company, so he attended a P-Max programme under the SkillsFuture initiative, which helped him understand the work practices better.

The experience has convinced Mr Tan that PMETs like him "must accept that the job market has changed". He said: "(We must) lower our expectations, or retrain ourselves to move into a different job."

Professionals, managers, executives and technicians, or PMETs, form an unusually large proportion of those asked to go as businesses restructure. Official figures released yesterday show that PMETs comprise 72 per cent of local residents made redundant. This is far higher than their share of 55 per cent of the resident workforce, excluding full-time national servicemen.

They were mainly displaced from the professional services and financial and insurance services industries, based on figures from the Manpower Ministry.

For non-PMETs, among clerical, sales and services workers, the most redundancies were in the wholesale and retail trade. Among production and related workers, the most redundancies were in manufacturing.

Locals were less vulnerable to layoffs than foreigners: Of the 19,170 workers who lost their jobs last year, 8,090, or 42 per cent, were foreigners, higher than their one-third share of the workforce.

Returning to the job market was also tough. The proportion of residents who got a job within six months was 47.9 per cent on average, the first time in at least seven years that it fell below 50 per cent.

PMETs and degree holders fared worse than average, with re-entry rates of 43.9 per cent and 42.5 per cent respectively.

DBS economist Irvin Seah said this group is particularly affected as industries like financial services are driven by external demand, making them more volatile than industries employing more lower- skilled local workers.

"Education should no longer be just about degrees but about skill sets, life skills and building resilience," he said.

There are several programmes to help job seekers. These include enhanced Adapt and Grow schemes to help them overcome job mismatches in the labour market as the economy restructures.

People long unemployed can tap the Career Support Programme for PMETs or the Work Trial programme for rank-and-file workers.

Both will offer added salary subsidies from next month, especially to employers who hire Singaporeans out of work for at least a year.

A new Attach and Train scheme will help workers get training while on attachment in sunrise industries that have yet to hire actively.

The labour movement's new Pivot programme offers vulnerable professionals greater peer support.

Said labour MP Patrick Tay: "I urge workers and employers to tap all these schemes and embrace the changes before the change (overwhelms) them."

Two-track labour market emerging
By Toh Yong Chuan, Manpower Correspondent, The Straits Times, 16 Mar 2017

The latest official figures released yesterday paint a gloomy picture and reflect a worrying situation: The emergence of a two-track labour market.

On one track are the jobless who face an uphill task in finding work. On the other track are people with jobs that give them a steady rise in income.

The growing divide between these two groups is becoming noticeable, and gives cause for concern.

Track one: Local unemployment rose last year. There were more local workers - Singaporeans and permanent residents - who want to work but could not find work. Last year's 3 per cent resident unemployment rate is the highest since 2010, when Singapore was hit by the global financial crisis.

Also, there were fewer jobs for the bigger pool of unemployed. For every 100 unemployed last December, there were only 77 vacancies, down from 91 three months earlier. This job vacancy ratio of 0.77 is the lowest since September 2009, when the global financial crisis resulted in a ratio of 0.54, meaning every 100 jobless were chasing 54 jobs.

Put both together - higher unemployment and fewer jobs - and it shows out-of-work locals are taking longer to return to the job market.

For every 100 jobless locals last year, 26 had no job for 25 weeks or more, up from 21 in 2015.

Worse, the proportion of these long-term unemployed rose last year to the highest since 2004. The hardest hit were degree holders and those aged 50 and older.

The Ministry of Manpower (MOM) has this assessment: "The labour market weakened in 2016, reflecting subdued conditions in several segments of the economy." On the outlook for this year, MOM "expects labour demand to remain modest".

The assessment does not mask the starkness of the bad news for those out of work. This is a bad time to be without a job.

Track two: Those on the payroll of employers fared well last year.

The median monthly income of Singaporeans holding full-time jobs rose 0.7 per cent from $3,798 in 2015 to $3,823. After adjusting for the lower costs of living last year, the rise is steeper, at 1.3 per cent.

Workers were also more productive last year. Labour productivity inched up by about 1 per cent, reversing declines in 2014 and 2015.

But even as unemployment rose, so did employment. Employers added 11,200 more local workers to their payrolls last year.

This may seem contradictory at first glance, but what happened was that the growth in the number of jobs could not keep up with the growth in the workforce. So even as more local workers found jobs, even more could not find work.

This gives a hint on what is needed to fix the problem of the tepid labour market - job creation.

It is the key solution - and the only solution.

Those with jobs are faring well. They earn more and are more productive. The same cannot be said for the unemployed.

But there will always be people with and without work, regardless of the state of the economy. This is also the reason economists regard full employment as the state where all eligible people who want to work can find work at prevailing wage rates. Full employment does not mean zero unemployment.

But what would be most worrying is when the lives of employed workers improve while the jobless sink into debt and depression. This is the "jobs divide", and there are signs of it happening here.

Government measures, however, are in place to prevent it from taking root. This month, MOM announced measures to help the long-term unemployed and mature workers. These include more subsidies for training, job trials and more salary support for employers who hire them.

There are also moves to help jobless workers switch careers. The Ministry of Health last week said it would spend $24 million to help mid-career workers switch and fill the 9,000 jobs being created in the public healthcare and community care sectors in the next three years.

These moves will not solve the problems of unemployed workers overnight, or even in the near term. But they give them a better shot at going back to work and riding out the economic uncertainties.

They also ensure the "jobs divide" does not add to pressures that can divide society.

More targeted help on the way for jobless PMETs

By Toh Yong Chuan, Manpower Correspondent, The Straits Times, 18 Mar 2017

Unemployed professionals, managers, executives and technicians (PMETs) will get more targeted help in finding jobs through smaller job fairs, Manpower Minister Lim Swee Say said yesterday.

The shift in focus aims to help jobless PMETs find work sooner, and keep the long-term unemployment rate in check, he added.

For PMETs who have been out of work for six months or longer, "organising a job fair with 10,000 jobs won't solve the problem", Mr Lim told reporters at a job fair.

He said these workers need personalised guidance from career coaches and employers who are willing to hire and train them, even if they lack experience in a sector.

Mr Lim's message for employers: "Don't keep looking for so-called plug-and-play kind of workers. Don't keep looking for workers who can fit into your job 100 per cent."

His comments came after the Ministry of Manpower (MOM) released a bleak report on Wednesday which showed that PMETs were the hardest hit by the tepid job market.

They made up 72 per cent of the local workers who were made redundant last year. This is far higher than their share of 55 per cent of the resident workforce.

They are also finding it harder to get back to work. While about 48 per cent of workers who were made redundant last year managed to find new jobs, the rate of re-entry for PMETs was 44 per cent.

To help PMETs get back to work, MOM announced various measures this month to help them switch careers and offered more incentives to employers to hire them.

The moves include training allowances of up to $4,000 a month for those who go on training attachments, and offering employers who hire PMETs aged 40 and above, who have been unemployed for over a year, higher wage subsidies under the Career Support Programme (CSP) for 18 months, up from 12 months.

To make it easier for smaller firms to join the programme, the minimum salary of eligible workers will also be lowered from $4,000 to $3,600 per month for them.

Yesterday, Workforce Singapore and the Employment and Employability Institute gathered more than 20 employers prepared to hire unemployed PMETs in a one-day, small-scale job fair that offered about 260 jobs. All the jobs pay at least $3,600 a month.

Mr Lim noted that enhanced measures saw an increase in the jobs offered at the fair from 150 to about 260. More workers also qualified for schemes like the CSP.

He also said that while the local unemployment rate and long-term unemployment rate - the proportion of residents who could not find a job for 25 weeks or more - had risen to 3 per cent and 0.8 per cent respectively, they are "considered relatively on the lower side by international standards".

To ensure these rates remain low, the Government is stepping up efforts like organising targeted job fairs to help unemployed workers back to work, especially those out of work for 25 weeks or more, he said.

"The longer they stay unemployed, the harder (it is) for them to come back (to work)," he said.

Mr Lim added that the quality of jobs also matters.

He noted that business leaders he met this week appealed for a relaxation of the foreign worker quota. However, they need to find a longer-term solution.

"It is not a sustainable solution. The jobs are there. If they cannot find workers, can we transform the job, make it more of a better job to be more attractive to locals?" he said.

"Moving forward, the quality of jobs is a factor that is going to determine whether we are able to overcome this potential stickiness in our unemployment rate."

MOM Statement on Labour Market Developments -15 Mar 2017

No comments:

Post a Comment