Govt paints dire picture of mismatch between jobs and skills

Govt paints dire picture of mismatch between jobs and skills
Donald Trump addressing the joint session of Congress. Photo: Reuters
Republic must ensure quality economic growth or face rising unemployment, says Manpower Minister
Published: 6:00 PM, October 10, 2016
Updated: 9:23 PM, October 11, 2016

SINGAPORE — Reiterating a dire warning that the local labour force growth could stagnate in a decade or so, Manpower Minister Lim Swee Say cautioned that the low jobs growth could persist and Singapore faces the prospect of rising unemployment if it does not minimise the job-skills mismatch and strive for quality economic growth.

With the number of locals seeking work far outstripping the number of jobs added by “many times” last year, Mr Lim stressed the need to “maximise the connectivity between job opportunities and job seekers”. 

Last year, 37,000 more Singaporeans and permanent residents left the workforce compared with the annual average in the previous three years, even as the number who entered it fell by about 36,000.  

“This is a swing of 73,000, and this has resulted in the flat growth in our local employment growth of only 700,” said Mr Lim as he responded to a slew of questions tabled by Members of Parliament (MPs) on the job situation. 

Between 2012 and 2014, an average of 226,000 locals joined the workforce and 153,000 left employment each year — translating to an average net increase of 73,000, or 79,000 including the self-employed, per year. 

The swing is partly cyclical but also structural and across all age groups, he said. 

“More importantly, the number of people retiring is also on the rise, doubling over the last two years. This will continue as more baby boomers enter retirement,” he said. 

Mr Lim added: “With our local workforce growing slower, it does not mean we can afford to go slower, too, in our efforts to create jobs. I will use 2015 as an illustration. Even though local employment went up by only 700, the number of locals looking for jobs was many times higher. We must not forget that there were 190,000 new entries of young locals and re-entries of mature locals in that year.”
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Concerns about the economy and the jobs situation dominated the Parliament sitting yesterday, with 15 MPs filing questions on these topics. 

Among other things, the MPs asked about the measures taken by the Ministry of Manpower to address the increase in the unemployment rate and the fall in the rate of re-entry into employment, as well as the outlook of the job market for the next 12 months. They also wanted to know what is being done to help displaced workers find new jobs. 

On the jobs front, Mr Lim said he shared Singaporeans’ concerns about the low number of jobs that were added to the economy last year. 

In the first half of this year, the figure went down by 200, resulting in a net increase of “just 500 over 18 months”, he said. “Fortunately, while the unemployment rate increased, it did not rise sharply,” Mr Lim said. “I was puzzled. Why didn’t the sharp drop in local employment growth lead to a sharp rise in unemployment?” 

The main reason was the slowdown in local workforce growth, he explained. And this trend “towards negligible levels, or even stagnation” by the mid-2020s would have major implications, he cautioned.

Singapore would have to ensure that the current “low (economic) growth” of 1 to 2 per cent is transitional, and strive towards “quality growth” of 2 to 3 per cent. 

“Even though flat local employment growth in the past 18 months did not lead to a sharp rise in unemployment rate or a sharp drop in labour force participation rate, we are concerned that this could still happen if the global economic situation does not improve, or worsens further,” said Mr Lim. 

He added that the Government was adopting a “balanced approach” in managing the inflow of foreign manpower, even as industries are undergoing transformation to achieve higher productivity gains. The annual increase in foreign manpower has dropped significantly from the peak of 80,000 in 2011 to about 24,000 in each of the past two years. 

Since October last year, companies’ Employment Pass applications were scrutinised on their ratio of locals to foreigners compared with the rest of the industry, their commitment to developing locals, and their economic and social impact on Singapore.

West Coast GRC MP Patrick Tay sought an update on MOM’s efforts to monitor “triple weak” companies that do not meet all three criteria. 

Of the 100 firms identified in February, about one-fifth have shown improvement and have been removed from the watch list, said Mr Lim. However, another 180 companies have been added to the list, he said. 

West Coast GRC MP Foo Mee Har suggested tweaking the EP scheme such that companies have to consider hiring Singaporeans first, if they have the requisite skills and qualifications. Firms should also let go of foreign employees first in a retrenchment exercise, she said. 

But Mr Lim said that he would hesitate to develop a “Singaporeans first” reputation for Singapore, citing the wrong signal that it could send. “The best way for us to help the locals is to focus on enhancing their employability,” he reiterated. 

Mr Lim noted that many job seekers have higher expectations and aspirations, and do not want jobs that have been newly vacated by others. 

The mismatch in jobs and skills has to be minimised, he stressed. To that end, the National Jobs Bank will be converted into a “one-stop and non-stop” online marketplace to match job seekers and employers, said Mr Lim. 

He said that, in the first eight months of this year, the Workforce Singapore — previously known as the Singapore Workforce Development Agency — and the Devan Nair Institute for Employment and Employability have helped more than 13,000 job seekers find employment in sectors such as infocomm technology, healthcare, and early childhood care and education. 

Of these, 45 per cent were professionals, managers, executives and technicians (PMETs), while the remaining were rank-and-file employees. 

To help PMETs, the MOM has more than doubled the sectors with Professional Conversion Programmes from 22 to more than 50 this year, and relaxed the qualifying criteria for the Career Support Programme to include more groups of PMETs, Mr Lim noted. Separately, the MOM is also creating more work trial opportunities for rank and file workers to try out new jobs.