Singapore HR directors welcome retirement reforms as city-state faces ageing workforce
Author: Tom Maresca | Date: 25 Jan 2017
Re-employment scheme is pro-worker and pro-business, says manpower minister Lim Swee Say
HR departments are gearing up for reforms designed to help Singapore confront the employment challenges of an ageing population which means the city-state is growing old, and fast.
According to the government’s National Population and Talent Division, the number of working-age citizens (aged 20-64) in the country peaked in 2015, at 2.2 million. The government projects that number will decline to 1.9 million by 2030, while the number of Singaporeans aged 65 and over is projected to more than double in the same period, from 440,000 in 2015 to 900,000 in 2030.
To address the changing nature of its society and workforce, on 9 January, Singapore's parliament amended the country’s Retirement and Re-employment Act (RRA) to raise the re-employment age to 67 years old, up from the current 65.
While retirement age remains officially 62, under the new scheme, employers will be required to offer re-employment to eligible employees aged from 62 to 67 – often in new positions, so as not to block the career development of younger workers.
The regulations will apply to all Singaporeans and permanent residents who turn 65 from July 2017 onwards.
Further ageing worker protection was added to the act: employees who turn 60 can no longer have their wages cut because they are older. Prior to the amendment, employers could cut a worker's wages by up to 10 per cent at 60.
However, employers' interests were also given consideration under the new amendment. An option was added to allow employers more flexibility in fulfilling their obligations by allowing willing and eligible employees to be re-employed by another employer.
Bob Aubrey, managing partner of HR consultancy Bob Aubrey Associates and chairman of the HR Committee of the European Chamber of Commerce in Singapore, said that HR departments will play a key role in implementing the new policies, in areas such as creating positions for older workers.
“The first question for HR departments is: How do we create jobs where seniors have an advantage?” said Aubrey, adding that older workers often offered greater reliability and stability. At the same time, he added, employers could offer older workers more flexibility in issues such as working hours.
Aubrey said that it is also incumbent on HR departments to help create work environments where older workers are valued and where employees from different generations are integrated. “You don’t want to have older workers on one side and younger workers on the other but have them mixing and respecting each other.”
Associate professor Daniel Goh, of the National University of Singapore, a non-constituency member of the country’s parliament, noted in a parliamentary debate that Singapore must still tackle an entrenched culture of ageism, one which has “shaped society’s view that senior workers are less valuable than younger workers.”
The overall re-employment scheme is a mechanism that is “both pro-worker and pro-business,” manpower minister Lim Swee Say testified before parliament.
“The difference between re-employment and retirement really is about mindset,” said Lim. “[It’s] about how are we going to be able to continue to address the concerns of businesses and the concerns of the younger workforce in terms of their career advancement; and, at the same time, address the concerns of the older workers for wanting to continue to be re-employed.”