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Tripartite guidelines will be launched by 2024, requiring employers to consider all requests for FWAs fairly and properly; HR capabilities will also be built to implement FWAs successfully.
Singapore's overall resident labour force participation rate (LFPR) has increased steadily, from 66.1% in 2011 to 70.5% in 2021 – comparable to the top five OECD countries. In particular, more women and seniors have joined the workforce, even during the pandemic. From 2019 to 2021, the female resident LFPR increased from 61.1% to 64.2%, while that of residents aged 55-64 increased from 69.9% to 71.1%.
However, as Minister of State for Manpower Gan Siow Huang believes, more can be done to potentially increase Singapore's LFPR further. One such key strategy, which she pointed out while speaking in Parliament on Tuesday (13 September), is to make work more flexible so that more can participate.
As Minister Gan shared, the Government is working with tripartite partners to promote flexible work arrangements (FWAs) and build HR capabilities to implement FWAs successfully. It will also be establishing a set of Tripartite guidelines on FWAs by 2024, requiring employers to consider all requests for FWAs fairly and properly. This will allow more workers to remain in the workforce or return to the workforce, while meeting other needs such as caregiving.
"The Government is also committed to improving access to affordable and quality preschool services, which enables parents with young children to go to work with peace of mind. Overall, the Government’s annual spending on the early childhood sector is expected to more than double over the next few years, from around S$1bn in 2018."
At the same time, the retirement and re-employment ages have been increased to 63 and 68 respectively on 1 July 2022. In line with the recommendations of the Tripartite Workgroup on Older Workers in 2019, the Government's "eventual aim" is to further increase the retirement and re-employment ages to 65 and 70 respectively, by 2030. This will support more senior workers who wish to continue working to do so.
MOM further encouraged employers to hire senior workers through the Senior Employment Credit which provides up to 8% wage offsets for Singaporean workers aged 55 and above, and earning below S$4,000 a month. At the same time, the Part-time Re-employment Grant supports employers in providing part-time re-employment opportunities to senior workers who may prefer a lower work intensity.
Meanwhile, to further promote local employment, Workforce Singapore offers the SGUnited Mid-Career Pathways Programme (SGUP), where employers can take in mature candidates on attachment programmes. Employers can also tap on career conversion programmes which provide higher support levels for mature hires.
"Fundamentally, to cope with the manpower crunch, our businesses need to continue to transform, increase their productivity and improve manpower efficiency. The Government remains committed to supporting businesses and workers to achieve this. Sector agencies are working closely with industry across the 23 industry transformation maps (ITMs).
Addressing the impact of inflation on local workers
In similar manpower updates, Minister of Manpower Dr. Tan See Leng has also addressed a parliamentary question on the impact of inflation on workers, and the provision of appropriate wage increments.
"When inflation goes up and prices rise for employees, costs similarly rise for employers. Employers themselves fundamentally need to make their companies more productive to be able to pay more to employees and cope with inflation," he said.
Minister Tan thus encouraged employers, employees, and the Government to therefore work together as tripartite partners to press on with economic transformation, raise productivity, and turn current challenges into longer-term opportunities.
He lists the ITMs as one such example. The ITMs aim to sharpen the competitiveness of companies and industries to enable workers to deepen their skills and increase their productivity. These improvements translate into better wages for workers, the Minister noted.
The Government is also supporting employers to restructure their businesses and upskill their employees, through initiatives such as the Workforce Singapore, which has rolled out job redesign and reskilling Pprogrammes to support employers to upskill their employees to take on enhanced job roles. Other schemes such as the Enterprise Development Grant and the Productivity Solutions Grant also aim to help businesses strengthen their capabilities.
"The Economic Development Board also works to attract investments in a wide range of sectors. The profile of investments has increasingly moved towards higher value-added and innovation-focussed activities that generate higher-paying jobs with good wage growth prospects which need to be filled by Singaporeans."
At the same time, Singapore's foreign workforce policies encourage employers to embark on productivity-led, manpower-lean growth. For example, MOM has tightened the Dependency Ratio Ceiling (DRC) and S Pass sub-DRC to nudge employers to reduce over-reliance on lower-skilled foreign workers so that they would press on with productivity improvements and strengthen their Singaporean core. The new progressive wage moves implemented on 1 September 2022 also include the new local qualifying salary requirement, which ensures that locals are employed meaningfully, rather than be given token salaries for firms to access foreign workers.
"Given the labour market we have today, where employment is back at pre-COVID levels and vacancies significantly outnumber jobseekers, employers who do not provide fair and sustainable wage increments will risk losing their workers."
As such, the National Wages Council (NWC) will issue its annual wage guidelines to employers and employees later this year to provide guidance to employers. The NWC, represented by employer, employee and government groups, recently convened on 1 September 2022 to formulate the new set of annual wage guidelines that will take effect from 1 December 2022. The NWC will set out wage recommendations taking into account both the economic recovery over the past year, and the uncertain global economic outlook going forward, including the impact of inflation on employees.
Lastly, Minister Tan pointed out that lower-wage workers have experienced "good wage growth" over the last five years. He shared that from 2016 to 2021, real income at the 20th percentile has risen 2.7% per annum, faster than at the median.
"This has put lower-wage workers in a better position to cope with inflation. The Government and tripartite partners will continue to uplift our lower-wage workers through the Progressive Wage Model. Nevertheless, we recognise that the impact of inflation hits lower-wage workers harder."
In that vein, the Government has announced several support measures, including the S$1.5bn Support Package announced in June 2022, to help lower-income households and vulnerable groups with inflation and cost of living concerns.
Ending his speech, Minister Tan affirmed: "We stand prepared to provide more targeted help for lower-income and vulnerable groups if the situation worsens."
Image / Shutterstock
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