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Employers and workers must change mindsets to face harsh reality of economic crisis: Economists
Their warning comes as the outlook for the job market remains murky — some of the economists said unemployment will worsen, while others expect things to stabilise.
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The Ministry of Manpower (MOM) said on Wednesday (Oct 7) that the unemployment rate for residents — citizens and permanent residents (PRs) — had climbed to 4.5 per cent in August, the highest in over a decade.
The overall unemployment rate, which includes foreigners, stood at 3.4 per cent.
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HOW MUCH WORSE WILL IT GET?
There was little consensus among the economists about the road ahead.
Mr Song Seng Wun, an economist from CIMB Private Bank, said the resident unemployment rate here could creep up to just below 5 per cent.
Although the Government has extended a helping hand to sectors hardest hit by the pandemic, jobs will still be at risk in these industries, he said.
Agreeing, Maybank Kim Eng economist Chua Hak Bin said he expects the total unemployment rate in Singapore to climb to above 4 per cent.
As the wage subsidies from the Government, which were aimed at preserving local jobs, are tapering off in the second half of the year, Dr Chua said the sectors most affected by the crisis will probably be forced to let go of more staff.
Meanwhile, United Overseas Bank economist Barnabas Gan expects the unemployment rate to rise just a touch, to 3.5 per cent, by the end of the year, as companies may continue to be reluctant to expand their headcount.
Similarly, DBS senior economist Irvin Seah said it is likely that Singapore’s unemployment rate has already hit bottom. If it does worsen, he added, it will be slight.
This is because many of the support measures rolled out by the Government have been aimed at helping residents, which should help to stem further job losses, he said.
WHAT WORKERS SHOULD DO
The latest job situation report showed that there were 117,500 job and training opportunities at the end of August, but only 33,100 jobseekers had been placed.
MOM chalked this up to a mismatch in expectations and skills, which the economists noted is natural — in a crisis that has decimated entire industries, it will take time for large swathes of the workforce to pick up totally new skills and switch careers.
They added it is also likely that jobseekers here are hesitant about moving into unfamiliar roles.
Mr Song said many workers, especially those just joining the labour force, have not accepted the reality that this is Singapore’s worst economic contraction ever.
“There is still a wish that (the situation) will go away, but as we’ve seen, it is not so easy to wish it away.”
Singaporeans would eventually have to be comfortable with “getting their hands dirty” and take on jobs that they may not have considered before, he said.
“Air-con servicing may not be the most sexy job, but it’s still essential, and... at least it generates some income while you are looking for something closer to (what you want).”
Mr Seah added that there is a mismatch between the available openings and wage expectations among older white-collar workers, saying that it may be hard for them to accept lower salaries when they have heavy financial burdens, such as mortgages or study loans and families to support.
“It is more difficult for (jobseekers) to accept compensation that can barely cover their monthly expenditure,” he said.
WHAT EMPLOYERS SHOULD DO
In the meantime, employers, too, have to change their mindsets if Singapore’s job market is to heal more quickly, the economists said.
For starters, they have to get used to the idea of paying higher wages to employ locals, instead of waiting for cheap foreign labour to return.
“If the foreign worker situation is going to remain tight, we will have to be willing to look within the domestic sector," said Ms Selena Ling, the head of treasury and research at OCBC bank.
She added employers also have to be more open-minded about training jobseekers who are not quite what they were hoping for, rather than wait for the perfect candidate to appear.
After all, Dr Chua said, the current crisis is a different beast from crises past.
The global financial crisis of 2008, for example, may have decimated the financial sector for several years, but the industry eventually rebounded and created new jobs. This time around, he said, whole industries look like they may never recover, or will take extremely long to do so.
And so, he said: “People will have to switch from jobs in dying sectors to growing sectors, and that is going to take time.”
He pointed out that while there are many job vacancies in the IT and cybersecurity sectors, for instance, such sectors require skills that people cannot learn overnight.
HOW THE LABOUR UNION IS HELPING
National Trades Union Congress (NTUC) assistant secretary-general Desmond Choo said the labour movement hopes to provide transitory financial and skills support and enhance better information fluidity in the job market.
“We urge our workers to approach NTUC, or NTUC’s Employment and Employability Institute and we will help them to be matched to a job or receive the necessary preparations to increase chances of landing a meaningful job,” he said.
- The outlook for jobs remains unclear as economists give mixed forecasts on unemployment rate
- High number of unfilled vacancies point to inertia among workers and employers, economists said
- Workers must embrace switching careers even to “unsexy” jobs, they said
- Employers must wean themselves off cheap foreign labour and pay more for locals
Their warning comes as the outlook for the job market remains murky — some of the economists said unemployment will worsen, while others expect things to stabilise.
Story Continues Below Advertisement
The Ministry of Manpower (MOM) said on Wednesday (Oct 7) that the unemployment rate for residents — citizens and permanent residents (PRs) — had climbed to 4.5 per cent in August, the highest in over a decade.
The overall unemployment rate, which includes foreigners, stood at 3.4 per cent.
Story Continues Below Advertisement
HOW MUCH WORSE WILL IT GET?
There was little consensus among the economists about the road ahead.
Mr Song Seng Wun, an economist from CIMB Private Bank, said the resident unemployment rate here could creep up to just below 5 per cent.
Although the Government has extended a helping hand to sectors hardest hit by the pandemic, jobs will still be at risk in these industries, he said.
Agreeing, Maybank Kim Eng economist Chua Hak Bin said he expects the total unemployment rate in Singapore to climb to above 4 per cent.
As the wage subsidies from the Government, which were aimed at preserving local jobs, are tapering off in the second half of the year, Dr Chua said the sectors most affected by the crisis will probably be forced to let go of more staff.
Meanwhile, United Overseas Bank economist Barnabas Gan expects the unemployment rate to rise just a touch, to 3.5 per cent, by the end of the year, as companies may continue to be reluctant to expand their headcount.
Similarly, DBS senior economist Irvin Seah said it is likely that Singapore’s unemployment rate has already hit bottom. If it does worsen, he added, it will be slight.
This is because many of the support measures rolled out by the Government have been aimed at helping residents, which should help to stem further job losses, he said.
WHAT WORKERS SHOULD DO
The latest job situation report showed that there were 117,500 job and training opportunities at the end of August, but only 33,100 jobseekers had been placed.
MOM chalked this up to a mismatch in expectations and skills, which the economists noted is natural — in a crisis that has decimated entire industries, it will take time for large swathes of the workforce to pick up totally new skills and switch careers.
They added it is also likely that jobseekers here are hesitant about moving into unfamiliar roles.
Mr Song said many workers, especially those just joining the labour force, have not accepted the reality that this is Singapore’s worst economic contraction ever.
“There is still a wish that (the situation) will go away, but as we’ve seen, it is not so easy to wish it away.”
Singaporeans would eventually have to be comfortable with “getting their hands dirty” and take on jobs that they may not have considered before, he said.
“Air-con servicing may not be the most sexy job, but it’s still essential, and... at least it generates some income while you are looking for something closer to (what you want).”
Mr Seah added that there is a mismatch between the available openings and wage expectations among older white-collar workers, saying that it may be hard for them to accept lower salaries when they have heavy financial burdens, such as mortgages or study loans and families to support.
“It is more difficult for (jobseekers) to accept compensation that can barely cover their monthly expenditure,” he said.
WHAT EMPLOYERS SHOULD DO
In the meantime, employers, too, have to change their mindsets if Singapore’s job market is to heal more quickly, the economists said.
For starters, they have to get used to the idea of paying higher wages to employ locals, instead of waiting for cheap foreign labour to return.
“If the foreign worker situation is going to remain tight, we will have to be willing to look within the domestic sector," said Ms Selena Ling, the head of treasury and research at OCBC bank.
She added employers also have to be more open-minded about training jobseekers who are not quite what they were hoping for, rather than wait for the perfect candidate to appear.
After all, Dr Chua said, the current crisis is a different beast from crises past.
The global financial crisis of 2008, for example, may have decimated the financial sector for several years, but the industry eventually rebounded and created new jobs. This time around, he said, whole industries look like they may never recover, or will take extremely long to do so.
And so, he said: “People will have to switch from jobs in dying sectors to growing sectors, and that is going to take time.”
He pointed out that while there are many job vacancies in the IT and cybersecurity sectors, for instance, such sectors require skills that people cannot learn overnight.
HOW THE LABOUR UNION IS HELPING
National Trades Union Congress (NTUC) assistant secretary-general Desmond Choo said the labour movement hopes to provide transitory financial and skills support and enhance better information fluidity in the job market.
“We urge our workers to approach NTUC, or NTUC’s Employment and Employability Institute and we will help them to be matched to a job or receive the necessary preparations to increase chances of landing a meaningful job,” he said.
