Skip to main content

Advertisement

Advertisement

Look Ahead 2021: Things looking up for job market, though more retrenchments still on the cards

As the world steps tentatively into 2021, TODAY takes a look at what could lie ahead in four areas: The economy, jobs, property and Covid-19 developments. In the third of this series, TODAY journalist Daryl Choo looks at what’s in store for the job market in the next 12 months.

Look Ahead 2021: Things looking up for job market, though more retrenchments still on the cards

While Singapore’s economy might have bottomed out, experts say there is still a long way to go before the job situation returns to normal.

As the world steps tentatively into 2021, TODAY takes a look at what could lie ahead in four areas: The economy, jobs, property and Covid-19 developments. In the third of this series, TODAY journalist Daryl Choo looks at what’s in store for the job market in the next 12 months.

  • While Singapore’s economy might have bottomed out, experts say there is still a long way to go before the job situation returns to normal
  • Covid-19 government assistance schemes for businesses are set to end this year but some industries are not expected to recover soon
  • Economists warned that retrenchment rates could rise even higher
  • The mismatch between the expectations and skills of jobseekers and potential employers has grown more pronounced because of Covid-19
  • Even though thousands are employed in short-term Covid-19 roles, the loss of these jobs when the pandemic ends will unlikely be a worry

 

SINGAPORE — As Covid-19 ripped through the economy in 2020, its effects were acutely felt in the labour market, where many workers were laid off and some struggled to find new jobs.

And even though the economic slump might have bottomed out, observers say there is still a long way to go before the jobs situation returns to normal.

The latest labour market report, released in December, showed that 9,100 workers were retrenched in the third quarter of 2020, higher than the peak recorded during other recessions except the 2009 global financial crisis.

The overall unemployment rate hit 3.6 per cent in September after seasonal adjustments, the highest since September 2003 during the severe acute respiratory syndrome outbreak.

However, the same report showed some positive signs: Resident employment has returned to near pre-Covid-19 levels and job vacancies in September rose for the first time in 2020, recovering from decade-low figures in June.

Experts told TODAY it is too early to tell if the worst is over for the labour market.

Going into 2021, they expect retrenchments to continue, especially among the hardest-hit industries.

And even if the labour market does start to recover, they expect it to be a slow and uneven process as uncertainties remain over the effectiveness of vaccines as well as a more pronounced jobs mismatch in the market.

OVERALL OUTLOOK

Slow, uneven recovery

Employers are still cautious with hiring, experts said.

  • Ms Selena Ling, head of treasury research and strategy at OCBC Bank, predicts a K-shaped recovery for the job market, where different industries recover at different rates. “This may mean that the unemployment rate may take longer to taper off and return to pre-Covid-19 levels,” she said.

  • Senior economist Irvin Seah from DBS bank said the labour market will remain soft for the first half of this year, but improvements could be felt in the second half.

More retrenchments

As the labour market recovers, hard-hit industries such as aviation and hospitality will lag behind and may continue to retrench more workers, experts said.

  • Some companies may not even survive as the pandemic drags on. If that happens, retrenchment rates may still climb higher, said Ms Ling.

  • Ms Angela Kuek, director of recruitment firm The Meyer Consulting Group, said there could be a spike in unemployment when government support measures such as the Jobs Support Scheme start to taper off next year.

  • The pandemic has also forced many businesses to adopt online tools and accelerate their plans for digitisation. Ms Low Peck Kem, president of the Singapore Human Resources Institute (SHRI), said: “We will likely still see some level of retrenchments (in 2021) as business models change and organisations reinvent themselves to be more digital and tech enabled.”

Positive signs

With Covid-19 vaccines already being rolled out in several countries, restrictions on trade and consumer activity will likely be relaxed, said Dr Kelvin Seah, senior economics lecturer at the National University of Singapore (NUS).

But he added: “To confirm we are out of the woods, we cannot just look at a single labour market indicator, like employment or unemployment, in isolation.”

Only when other indicators such as median incomes and gross domestic product consistently point towards recovery can Singapore be sure that it is on the road to recovery, he said.

A survey of 476 employers published in December by recruitment agency ManpowerGroup found that 12 per cent of them expect to return to pre-Covid hiring levels within the first quarter of 2021. Overall, the net employment outlook recorded by the firm’s quarterly survey was the strongest level in six years.

JOBS MISMATCH

In its final weekly job situation report for 2020, the Ministry of Manpower (MOM) said close to 60,000 jobseekers were placed into opportunities under the SGUnited Jobs and Skills Package from April to October.

But there were still more than 120,000 jobs and training and attachment opportunities available, of which a majority were for long-term jobs.

Why are there so many unfilled jobs, especially at a time when the resident unemployment rate is 4.5 per cent? 

Observers said this could be due to a mismatch in the expectations and skills of jobseekers and the potential employers.

This mismatch is a perennial problem that has been around for years, the experts noted.

But it has been made more pronounced because of Covid-19, as swathes of workers in the hard-hit industries were displaced but may not have the skills to fill openings in growth sectors such as info-communication technology, healthcare and advanced manufacturing.

The Government, on its part, has been highlighting the sectors that are still hiring through its regular jobs situation report.

Ms Kuek, from The Meyer Consulting Group, noted that the Government has also been “aggressively” getting tech firms such as Google and Shopee’s parent company Sea Limited to commit to hiring trainees.

The aim of these training programmes is allow entry-level jobseekers to pick up job experience and help mid-career switchers pick up new skills and try out a new industry.

But the challenge, DBS’ Mr Seah said, would be for policymakers to ensure that the vulnerable segments in the labour market — particularly the middle-aged, lower-educated and lower-paid workers — do not get left behind amid the rapid pace of technology disruption.

TRAINEESHIPS AND COVID-19 JOBS

Traineeships

Of the 60,000 positions placed under the SGUnited Jobs and Skills Package, 11,000 were for traineeships and attachments, MOM said in December.

Will we see a spike in unemployment when government funding for these temporary training programmes end?

  • Some of these trainees could be offered a full-time position after their traineeship ends, NUS’ Dr Seah said. “Much time and resources have been devoted to train and groom these individuals, so companies are likely to have an incentive to hold on to them.”

  • Ms Low, SHRI’s president, said that even if the trainees are not converted, the skills and experience they gain would make them more marketable in their future job searches.

  • Added Dr Seah: “Whether or not we will see a spike in unemployment when funding for traineeships end really depends on whether global demand can recover fast enough. If global demand for goods and services recovers sufficiently quickly, then those currently under the traineeship programmes can easily find jobs, and unemployment need not rise.”

Covid-19 jobs

Workers in the thousands of Covid-19-related short-term contract jobs, such as the swabbers and safe distancing ambassadors, could find their services no longer needed after the pandemic.

The MOM said that between April and end-November, about 4,100 jobseekers were placed in healthcare-related Covid-19 operations, such as swabbers and swabbing assistants.

The Ministry of Sustainability and the Environment, which leads the safe distancing enforcement in Singapore, told TODAY on Tuesday (Jan 5) that the agencies it works with currently employ 2,700 temporary staff as safe distancing ambassadors.

But experts say the loss of these jobs should not be a worry as these are temporary seasonal roles created to cope with the immediate needs of combatting the pandemic.

Many of the workers in these temporary roles come from the sectors most affected by the pandemic, such as tourism and aviation, said Ms Low. These workers will be able to return to their previous line of work when their industries recover.

And if they cannot get a job in their previous roles, employers should look beyond their past job titles and focus instead on the skills and capabilities they bring, Ms Low added.

“Then I am sure we will be creative enough to find adjacent roles these individuals can bring to the table and continue to be relevant into the future.”

Related topics

Jobs Covid-19 coronavirus retrenchment

Read more of the latest in

Advertisement

Popular

Advertisement

Stay in the know. Anytime. Anywhere.

Subscribe to get daily news updates, insights and must reads delivered straight to your inbox.

By clicking subscribe, I agree for my personal data to be used to send me TODAY newsletters, promotional offers and for research and analysis.

Aa