What does the Budget have in store for PMETs?
by Yoong Ren Yan
THEY say you won’t know how it feels until it hits you. There have been signs of an economic slowdown for some time now, but the warnings remained warnings – until now. According to the latest manpower report, 15,580 workers were laid off last year, the highest number since 2009 when 23,430 were made redundant at the height of the global financial crisis.
Why is all this happening? A combination of a gloomy global economy, and restructuring efforts in Singapore, none of which show any sign of changing. Layoffs are actually picking up with a third of last year’s layoffs happened in the last quarter. Our relatively low unemployment rate – 2.9 per cent for Singaporeans – may not hold steady for much longer.
But what might be a cause for greater concern is whose jobs are at stake. Of those made redundant last year, 71 per cent were professionals, managers, executives, and technicians (PMETs), many from the professional services, wholesale trade, and finance industries. About 65 per cent were aged 40 and above.
It’s little wonder that Silver Spring, a social enterprise which focuses on professionals, managers, and executives (PMEs) aged between 40 and 70, has seen applications on its job portal spike 50 per cent over the last six months. Also, the National Trades Union Congress (NTUC) helped 50 per cent more PMEs over the past year than the year before.
But targeted job portals or programmes can’t solve the problem if there aren’t enough jobs.
Prospects for those laid off aren’t rosy. Vacancies fell to their lowest level in four years. There are still more vacancies than unemployed people, but only just with 1.13 vacancies per unemployed worker. And just half of those laid off could find jobs within six months, down from 59 per cent a year ago.
As always, PMETs and older workers face the most difficulty in getting another job. PMET vacancies fell by 23 per cent between March and December last year. A quick check on Silver Spring revealed just 39 PME jobs available.
So the skills of those jobless don’t match the jobs available, and thus they are staying out of work longer. These are classic indicators of a structural problem in our labour market – one that the G is already aware of, and is responding to.
West Coast MP Patrick Tay, who is also NTUC assistant secretary-general, has suggested a “sectoral approach” to help industries where job losses are concentrated. NTUC is also giving PMEs union representation to better serve their needs. For instance, as part of NTUC’s U PME programme, the Association of Banks in Singapore now has a jobs portal for retrenched workers to find employment at other banks.
Of course, if banks are retrenching en masse, it’s difficult to see how a jobs portal would help. Instead, workers may need retraining to join other growth industries, including healthcare and information and communications technology.
That’s the objective of the multi-billion dollar SkillsFuture initiative, which may be put to an early test given these employment numbers.
And to incentivise companies to hire middle-aged PMEs, the G is piloting wage subsidies as part of the Career Support Programme. For a 50-year-old PME unemployed for more than six months, for instance, the G is offering a year-long subsidy for jobs that pay more than $4,000 a month. It will pay up to $2,800 for the first six months, and up to $1,400 for the next six months. It already funds PME retraining through the Professional Conversion Programmes.
The G’s response will be clearer come tomorrow (March 24), when Finance Minister Heng Swee Keat presents his first Budget. Mr Heng has promised a “strong focus” on the economy, including help for the “variegated landscape” of small and medium enterprises here.
But what about workers? While the global financial crisis was far more severe, the 2009 Budget might offer clues on what the G has planned. As part of the Resilience Package, then Finance Minister Tharman Shanmugaratnam announced a temporary Jobs Credit, which subsidised the wages of all employees by up to $300 per month. Such a broad-based policy can weather a recession, which we may be due for this year. But it is very costly seeing as the G tapped into the reserves to fund it, and may not even be appropriate if jobs and workers are mismatched.
In 2009 as well, Mr Tharman rolled out the Skills Programme for Upgrading and Resilience – the predecessor to SkillsFuture – with highly subsidised PME-level courses. Some tweaks to SkillsFuture, targeted at middle-aged PMEs, may be on the cards this time round.
These are trying times to be presenting the first budget of a new term. Mr Heng has already said the G plans to be “particularly prudent”. So while the spike in layoffs is a concern, expect any policy changes to be targeted and incremental for now.
Featured illustration by Sean Chong
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