It is imperative that jobs are central in an economy where GDP growth was two percent last year and forecasted to be in the range of one to three percent this year. Growth is expected to be uneven across sectors and the restructuring process could intensify, ushering profound changes into the job market. It is inevitable that workers will be displaced as companies restructure.
“Jobs must be a key focus for Singapore to lead and drive to transform economy.”
—PM Lee Hsien Loong,
May Day Rally 2017
In Singapore, the unique tripartite collaboration among unions, employers and the government has worked to create and match jobs for displaced workers as well as those entering the workforce. The unemployment rate in Singapore is much lower than in any other developed countries, but economists project this to rise. The rate inched up from 2.2 percent in December 2016 to 2.3 percent in March 2017 but remains considerably lower than the five to 10 percent seen in most developed economies.
OLDER WORKERS
The Singaporean economy faces the same pressures as other developed economies: an ageing workforce in industries that are in a constant state of flux. The share of those aged 60 and over in the resident labour force has more than doubled over the last decade from 5.5 percent in 2006 to 13 percent in 2016.
An ageing workforce not only has a bearing on the acquisition of new, industry-relevant skills – impeded by the possible need to unlearn the irrelevant old skills and relearn the relevant – but also one that is more expensive due to cumulative salary increases. It is not a simple case of wage increase outstripping increases in productivity. That is an economics discourse and the metrics involved are subject to debate and are not the focus of this article.
This article discusses the social challenges faced by the ageing workforce; the cost-related commitments incurred by them over the years such as mortgages and children’s schooling; and fixed costs that cannot be adjusted in the short to medium term.
Mature workers who lose their jobs tend to take longer to find new jobs. The unemployment rate for those aged 40 years and over rose to 2.8 percent in March this year, up from 2.3 percent in March 2016. The average time taken to secure a job was the highest among residents aged between 40 and 49 at 2.33 months in 2015. The decline in re-entry rate was the highest for residents aged 40 and over, at 58.7 percent in 2016, down from 67.7 percent in 2015.
Mature professionals, managers, executives and technicians (PMETs) are hit harder. In the first quarter of this year, PMETs constituted the majority (71 percent) of residents who were made redundant, the bulk of whom were 40 years old and above: 34.7 percent were between 40 and 49, and 35.5 percent were 50 and above. To compound the problem, the rate of re-entry into employment for mature PMETs has declined, falling to 60.6 percent in the first quarter of 2017 from 63.4 in the first quarter of last year.
It is imperative that not only the overall unemployment rate in Singapore is monitored but also unemployment according to age, income bracket and occupation. The underlying factors contributing to youth unemployment and unemployment among older workers are different and may vary as the economic landscape changes.
During the May Day Rally 2017, the strategies outlined included creating new jobs. The business-friendly climate has been Singapore’s winning formula for the last 50 years. However, the high value investments being attracted into Singapore today need further unpacking. It would be interesting to know what the number of jobs created per $10 million investment in technology is; the ratio of Singapore Citizens being hired vis-à-vis Permanent Residents and foreigners (Pass Holders); and how these metrics are changing over time.
It is worth noting that data from the Economic Development Board (EDB) suggests that investments secured are not directly proportional to the number of jobs created. There is a valid concern at the policy level on whether there are qualified Singaporeans to fill these jobs. Yet, certain groups have found it a challenge to be rehired, in particular, the more mature and senior PMETs.
It is evident that mature PMETs are particularly vulnerable to being laid off as the Singapore economy restructures due to ripple effects of technology or lower operating costs overseas. To generate a better analysis of the plight of older PMETs, there is a need for a more granular definition of PMETs. This is because there is a vast difference in the rehiring prospects and available alternative jobs amongst the three broad bands of PMETs:
- PMET Band I: Younger PMETs (below 40 years) who are in the S$90,000 per annum income bracket
- PMET Band II: Middle-aged and matured (45 and above) senior PMETs who are in the S$225,000 per annum income bracket
- PMET Band III: Very Senior, ‘C’ level Executives who are earning in excess of S$500,000 per annum.
TRAINING WORKERS TO GROW IN THEIR JOBS TO PREPARE FOR THE FUTURE
In Singapore, there is no shortage of support for displaced workers to upgrade their skills and knowledge. The Adapt and Grow scheme, which helps displaced workers switch sectors and find new jobs, may be applicable to PMETs in Band I.
The Public Service has been particularly helpful in transiting mid-career Band 1 PMETs and placing a value on their experience and maturity. It must be recognised that 1,000 Singaporeans found new jobs in 2016 through schemes such as Professional Conversion Programme (PCP) and Career Support Programme (CSP), a third of them in the Public Service.
A willingness to try something new, not just new jobs with new employers, is a hard reality especially for PMETs in Band II. Due to their seniority, there may be little transferability of skills from their past employment to a potential new career in a different industry. Consequently, this triggers a mismatch between remuneration and obligations. This is the reality despite the Ministry of Manpower’s reskilling support for employers through programmes such as the PCP. The efficacy of such a programme on Band II is doubtful.
I dub Band II PMETs the ‘Sandwiched Class’ in the employment realm. The reason is that this group managed to ride the wave of meritocracy during the years of economic expansion but now find themselves at a crossroads. Those in this category are at a very uncomfortable junction: their middle-class lifestyle is being rocked, akin to birds flying just above the threatening waves, susceptible to every economic turbulence as the wings of their career skim just above the waves. They are workers who formed the bedrock of Singaporean society but who are now being assisted by a myriad of programmes and initiatives. A new social safety net is gradually being woven by society to ensure that they lead a dignified life.
Band II PMETs or the ‘Sandwiched Class’ is at a juncture where, if a job comes looking for them, say, via a headhunter, they can expect a job offer that tops their current earnings by up to 45 percent However, if they are looking for a job after being made redundant, they would have trouble finding one even if they lower their salary expectations by 60 percent. It is thus not a case of lowering expectations, neither is it reskilling nor embracing the digital-aged future economy.
In contrast, those who are either born with a silver spoon in their mouths or who have reached the top rungs of the income brackets through meritocracy have built an egg nest for themselves and their families. This, and the support of outplacement assistance, puts them in a relatively secure position.
Thus the adage, “you are never too old to learn”, and the advantages of the well thought-out Industry Transform Roadmaps (ITM) revealed by the Committee on the Future Economy (CFE) in 2017 may not apply uniformly across the PMET bands. The 2,000 PMET jobs expected to be created in the logistics industry in the next five years primarily addresses the needs of Band I but may not be efficacious for the needs of Band II.
The tripartite partnership has served us well from the time of Great Britain’s withdrawal east of the Suez in 1971 to the Asian Financial Crisis of the late 1990s. Together, as a society, we made changes, made sacrifices and forged ahead. However, we have never had to deal with Band II PMETs in such numbers.
A senior Human Resource Director of a US$160 billion US technology company told me in a job interview in 2007 that “your next job will come from someone who knows you, or from someone who knows someone who knows you.” The firm’s market capitalisation exceeds US$700 billion today.
Anecdotally, there is an addition to the already rich tapestry of former senior executives driving taxis and ‘for hire’ private vehicles in Singapore. A few of my interns from local universities casually shared with me that, from their observation, a proportion of the MBA students in their universities were middle-aged and in between jobs. Can we match a job for these fellow citizens? The time will come when they will stop looking for a meaningful new job but instead are prepared to give meaning to any new job. Can we afford to neglect this group and the families they are supporting?
We are primarily a double-income family. A spouse who is meaningfully employed does cushion the impact on the family. However, we still have to deal with the prevalent ‘value’ of frowning upon a situation where a wife is gainfully employed while the husband is, at best, underemployed. Will society open up to new social norms or will the resulting tensions preoccupy the ministry responsible for family matters more than the ministries responsible for the economy?
Conventional wisdom states that the average person in a developed economy goes through seven careers in a lifetime. While there is no evidence to support this assertion in Singapore, my current experience seems to suggest that there is some truth in this. I am from the Baby Boomer generation.
Today, I am a reluctant entrepreneur in cognitive analytics, a Singapore-based venture builder and a sympathiser of Band II PMETs, because I recognise their challenges. Working amongst younger and more energetic colleagues since 2009, I am grateful for this opportunity at this stage of my career. ⬛
MH Nazzim is the Chief Operating Officer of Vector Scorecard (Asia Pacific) Pte Ltd.
