Singapore steels itself for economic downturn
Author: Georgi Gyton
Unemployment on the up, but real estate, finance and services sectors provide grounds for optimism
The Singaporean economy has undeniably been hit by faltering global markets, leaving employers struggling to grow their businesses, and unemployment rates reaching new highs. The latest statistics from the Ministry of Manpower (MOM) suggest the number of people without work in the second quarter of 2016 reached a seven-year high, with preliminary estimates of just over 68,000.
But despite the subdued economic conditions, certain sectors are more optimistic about growth, while the government is working to try to future-proof Singaporean careers by focusing on workers' skill development.
The latest Manpower Employment Outlook Survey reported that hiring intentions in Singapore's finance, insurance and real estate sector were up 19 per cent for the fourth quarter of the year, signalling continued growth, while the outlook for recruitment in the services sector stood at +15 per cent for the same period. Mining and construction reported a negative outlook, however, at -2 per cent.
Overall estimates were modest, with 13 per cent of employers expecting staffing levels to increase, 5 per cent to decrease and 73 per cent predicting no change.
Linda Teo, country manager for ManpowerGroup Singapore, says hiring sentiment is reflective of the current state of the broader economy. "Singapore, being export-driven, has clearly been affected by China's slumping growth, the downturn in commodities and the uncertainty due to Britain's vote to withdraw from the EU," she says.
Associate professor Toh Mun Heng, from the Department of Strategy and Policy at NUS Business School, says that "rising retrenchment of PMETs [members of the professional class] and, more recently, the number of graduates seeking jobs which are exceeding the number of vacancies, has put many Singaporeans in a more sombre mood."
One silver lining, however, is that companies are now more motivated to seriously consider productivity and innovation. "And the enlightened ones are willing to send their employees for training and skill upgrading," says Dr Toh.
Meanwhile, the government's Workforce Development Agency (WDA) has been working on a number of initiatives to try and boost employment figures, and has helped around 10,000 unemployed Singaporeans into work since the start of this year. It has also recently announced plans to restructure and expand its remit.
Speaking at a parliamentary session, minister for manpower Lim Swee Say said the agency's Adapt and Grow initiative had "enhanced and expanded the package of employment assistance," as well as "ramped up the number of job fairs and other career support events, such as career workshops." In September, for example, the WDA piloted a virtual careers fair through the scheme, with around 50 employers offering 500 vacancies at an online event.
The planned reorganisation of the agency will see it evolve into Workforce Singapore (WSG), which will "go beyond helping the unemployed find jobs" and will help Singaporeans manage career transitions throughout life, he says. "This is to maximise matching between the aspiration of workers and the manpower needs of businesses," says Lim. "In addition, it will work with businesses to redesign jobs and improve HR practices so that they can turn their human resources into their human capital."
Dr Toh says that while there are a plethora of schemes and programmes available to help those who are unemployed or retrenched, "two hands are needed to clap. Workers have to play their part, be actively involved and willing to pick up a new skill wanted by industries," he says.
Dr Toh believes that the restructuring of the WDA into a statutory board, "focusing on the development of skillsets that are extendable and have a long shelf life", will help. Future skills initiatives are a step in the right direction, but there needs to be a nationwide culture that embraces learning new skills throughout a career lifetime, he says.
Senior lecturer Chee Mew Leng, from the Department of Management & Organisation at NUS Business School, says there are measures employers can take to keep staff motivated in a downturn, including communication and recognition. She says: "Investing in the development of human capital sends a message to the employees that the organisation is committed to their long term growth and development."