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S’pore ‘most resilient’ in Asia against threats of ageing workforce, automation, but pales against West: Study

SINGAPORE — Singapore came in the bottom half (13 out of 20) in an index ranking the major global economies' resilience against the threats of an ageing workforce and job automation.

S’pore ‘most resilient’ in Asia against threats of ageing workforce, automation, but pales against West: Study

Singapore's older workers were found to be at greatest risk of being upended by automation compared with younger members of the workforce, a study found.

SINGAPORE — Singapore came in the bottom half (13 out of 20) in an index ranking the major global economies' resilience against the threats of an ageing workforce and job automation.

Yet, in Asia, it topped the ranking, eclipsing regional powerhouses China, Japan and South Korea in the Ageing and Automation Resilience Index.

Released on Wednesday (Sept 18), the index by consulting firm Mercer and research institute Marsh & McLennan Insights measured countries’ resilience against an ageing society and job automation among older workers aged 50 and above, and the strength of their retirement system.

While Singapore fared better than its neighbours, its older workers were found to be at greatest risk of being upended by automation compared with younger members of the workforce. This, said the groups behind the study, pointed to older workers’ “acute” vulnerability to automation.

The study’s findings came a month after the Singapore Government announced that it would raise the retirement and re-employment ages in stages.

The retirement age will go up from 62 to 63 in 2022, and to 65 by about 2030. As for the re-employment age, it will climb from 67 to 68 in 2022, before being raised to 70 by about 2030.

Here are the findings of the study and what they mean.

MOST RESILIENT IN ASIA AGAINST AGEING WORKFORCE, AUTOMATION

The Ageing and Automation Resilience Index combined “resilience scores” measuring risks associated with an ageing society and job automation among older workers with the Melbourne Mercer Global Pensions Index’s measure of the adequacy of the pension systems of countries, based on their design and structure.

Why these measures matter: An ageing society throws up concerns over financial security. As a country’s population greys, workers need to stay employed for longer periods so that they do not chip away at their savings and stumble into financial difficulty. Yet at the same time, older workers — especially those in low-skilled or medium-skilled jobs — are in danger of becoming jobless or resorting to irregular or underpaid work amid the Fourth Industrial Revolution, a fusion of technologies such as artificial intelligence and robotics.

What the study found: Singapore, with an index score of 14.6, pipped the other three Asian countries studied — Japan (8.9), China (7.4) and South Korea (7.1). While Singapore was found to be the most resilient in Asia, it was 13th on the index of 20 countries. Japan took 17th place, China 18th and South Korea came last.

The top three spots went to Denmark (with an index score of 20.4), Australia (20.3) and Sweden (20). Their impressive pension and welfare systems, and increasingly active and skilled populations of older workers will “prevent serious fallouts”, the study found. On the reverse, the inadequacy of China and South Korea’s pension systems will “endanger older populations”.

RISK OF JOB AUTOMATION: OLD VS YOUNG

On the threat of automation, older workers in Singapore were found to be at greatest risk of having their jobs upended by automation compared with their younger counterparts.

Its score on this count was higher than that of Chile, South Korea, China, the United Kingdom and Switzerland, for example.

Why so: There are several key drivers: Educational levels, the size of manufacturing industries, and the strength of welfare and financial systems. For instance, fewer older workers are at risk of being disrupted by automation in countries with stronger welfare systems, as workers are less likely to remain in low-skilled jobs with better welfare and pension systems. Places with higher educational levels and smaller manufacturing industries also have fewer older workers whose jobs are at risk of being automated.

What can be done: The groups behind the study said the private and public sectors must join hands to ease the transition of older workers into retirement or renewed work. Failure to reinvest returns from automation into the workforce will give rise to “serious fallouts”. Not only will social and income inequality widen, retirement-savings gaps and pressures on pension systems will increase. Jobs available to older workers could also become increasingly low-paying or irregular, for instance.

The big picture: Overall, Singapore ranked ninth out of 15 major economies when it came to the average risk of automation to older workers (54 per cent). This means that, on average, 54 per cent of tasks done by older workers here can be automated, based on the type of jobs these workers are holding.

China’s older workers were at greatest risk (76 per cent), followed by Vietnam and Thailand (both 69 per cent), and South Korea and Chile (both 63 per cent).

HOW TO MANAGE AN AGEING WORKFORCE

Shared responsibility for financial security: Responsibility for the financial security of ageing workers does not fall squarely on employers or governments alone, Mercer said.

Granted, governments will have to put in place precautions against poverty for sections of the workforce that have not planned for or cannot afford retirement, for example. Employers, for their part, must provide an environment where employees have access to benefits programmes, and offer flexibility and “supported phased transitions” as workers come to the end of their careers.

But individuals, too, have to prepare for these events and for potential reskilling.

A ‘talent-pooling consortium’: This initiative allows individuals, including those whose jobs may be hit by automation, to enter and benefit from the freelance economy and from more flexible approaches to work. Older workers can join pools of other workers with specialised skills and vast experience, or be tapped to mentor and coach other workers. Various organisations with these needs will then have access to these pools of workers.

Planning for the transition: Employers must grasp the types of training that will best bridge skills gaps, irrespective of age. Individualised assessments can identify present levels of competence, skills or knowledge in various areas, and compare these with the levels required for a particular job or another position in an organisation.

Related topics

automation ageing Artificial Intelligence resilience workforce

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