The Ministry of Manpower's (MOM) Q3 Labour Market Report released yesterday noted an improving local labour market in the quarter.
While there were 3,400 retrenchments in the third quarter of 2017, fewer employees were laid off compared to Q2 2017 (3,640) and the same quarter a year ago (4,220). This decline was attributed to manufacturing (from 840 to 730) and services (2,330 to 2,180). In contrast, layoffs rose in construction (470 to 490).
Unfortunately, the bulk (70%) of retrenched residents were professionals, managers, executives and technicians (PMETs), higher than their composition of the workforce.
Sector wise, more than half (64%) of layoffs came from the services sector - mainly in wholesale trade (14%) and financial services (13%).
A total of 11,040 were laid off in the first three quarters of 2017, lower than the same period a year ago (13,730).
Rising re-entry into employment
Thankfully, MOM's report also pointed to a rise in the six-month re-entry rate of retrenched residents to 66.4% in Q3 2017 - compared to 64.5% in the preceding quarter and 64.4% in Q1 this year.
In particular, it noted that younger workers below 30 (82%) and production and transport operations, cleaners and labourers (75%) had the highest rates of re-entry.
Conversely, older residents aged 50 and over continued to face employment challenges - registering below-average re-entry rates despite the improvement over the quarter.
Unemployment rate remains relatively unchanged
For the second consecutive quarter from June to September 2017, the seasonally adjusted unemployment rate for citizens declined from 3.3% to 3.2%. While, the overall unemployment rate and resident unemployment rate remained unchanged at 2.2% and 3.1% respectively.
However, the report noted that these rates remained higher than a year ago - 2.1% overall, 2.9% resident, and 3.0% Singapore citizen.
The report also noted that despite the unchanged resident unemployment rate, long-term unemployment rates among residents edged up slightly from 0.7% in June 2017 to 0.8% in September 2017 - the same level as a year ago.
Ease in decline of total employment
MOM's report also noted an ease in the decline in total employment from a 7,300 contraction in Q2 2017 to 2,300 contraction in Q3 2017.
At the same time, the decline in total employment (excluding Foreign Domestic Workers (FDW)) has been easing since the beginning of the year. It was found to contract by a smaller extent (-4,100) than the previous two quarters (1Q 2017: -9,400, 2Q 2017: -7,900).
MOM noted that the decline continued to be due mainly to the decrease in Work Permit Holders in marine and construction. In contrast, employment growth occurred in sectors including community, social and personal services, accommodation, financial services and professional services.
Job vacancies remained the same
In Q3 2017, there were 49,000 seasonally adjusted job vacancies (among private sector establishments with at least 25 employees and the public sector), same as the previous quarter.
In Q3 2017, 48% of the vacancies were for PMETs, followed by clerical, sales & service workers (27%) and production & transport operators, cleaners & labourers (24%).
The seasonally adjusted ratio of job vacancies to unemployed persons was 87 vacancies per 100 unemployed persons in Q3, an improvement from 85 in Q2 2017, continuing the uptrend observed this year (81 in Q1). Nevertheless, there were still more unemployed persons than job vacancies in September 2017.
Turnover rates remained unchanged while resignation rate rose
In the third quarter of 2017, the seasonally adjusted recruitment rate (2.1%) held steady while resignation rate rose back to the levels held prior to the brief decline in the second quarter of 2017 (1.8% in Q3, 1.7% in Q2, and 1.8% in Q1).
Notable increases were seen in manufacturing (especially electronics) and administrative and support services, while declines were more pronounced in food & beverage services and professional services.
Slightly shorter hours worked
There was a dip in the average total weekly paid hours worked per employee from 45.2 hours in Q2 2017 to 45.1 hours in Q3 2017, while paid overtime hours held steady at 3.0 hours.
Compared to a year ago, both the hours worked and overtime hours remained lower - in Q3 2016, total hours worked and overtime hours stood at 45.6 and 3.3 respectively.
Commenting on the report findings, Mayank Parekh, CEO, Institute for Human Resource Professionals (IHRP), said: "While it is encouraging to see the labour market improving, it is too early to say what the impact will be on long-term unemployment rates as companies are still cautious when it comes to hiring."
Parekh noted that the increasingly short-term contracts and on-demand workforce is changing the nature of the job market while digital transformation and increasing use of technology is impacting skillsets.
"Companies will be looking to their HR departments to navigate through these challenges. In this environment, companies are looking for candidates that fit well in the work culture, are flexible, adaptable and possess a great learning attitude," he added.
Looking towards 2018, Philippe Martinez, regional managing director, Asia & country manager, Adecco Personnel (Singapore), said: "We anticipate a relatively rosier outlook in terms of overall employment. The services sector looks set to be a key contributor of this growth. We have identified pockets of growth in segments of the services sector, particularly in financial and insurance services (growth of 6.6%*) and iInformation and communications (growth of 3.2%*)."
Martinez further noted that creation of roles such as mobile developers (Payments) and in cybersecurity has multiplied as Singapore moves towards establishing itself as a financial technology (FinTech) hub regionally.
"As the labour market adjusts, in line with the positive shift in the economy, hiring is set to increase but this will be uneven across sectors. Moreover, wage growth will be low or modest at best given that there is still some slack in the labour force. Given this, we observe rising interest for flexible workforce among some companies through contract, temporary and even on-demand roles to meet business needs," he added.
Infographic and lead image / Ministry of Manpower