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Ahead of Budget 2024, here’s what employers and workers in Singapore should know

Ahead of Budget 2024, here’s what employers and workers in Singapore should know

Citing “tough times ahead”, NTUC and SNEF have called out an urgent need to introduce transition support for displaced workers, keeping in mind the recent and upcoming retrenchment trends.

The very latest data on economic sentiments, capturing views of 2,000 respondents in Singapore in December 2023 to January 2024, highlights intensifying concerns about job security.

Two in five (40%) Singaporean workers are worried they are likely to lose their jobs in the following three months – a figure that has almost doubled since a similar survey was conducted in 2023 (25%).

Another poll, with close to 185 workers, found that about a third (31%) of them that structural trends such as automation, AI and sustainability will threaten their jobs.

These concerns are not unreasonable, as most employers and employees are bracing for a tough year ahead. The good news, however, is that a lot is being advocated for to tackle labour-related anxieties, such as a transition support package for displaced/retrenched workers, more emphasis on financial education, and further upskilling & reskilling programmes.

This was the key message shared at a joint media conference held by the National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF) on the economic & manpower outlook ahead of the Budget Statement which will be delivered on 16 February 2024.

The session, helmed by NTUC Secretary-General (SG) Ng Chee Meng (pictured above, right) and President of SNEF Dr Robert Yap (pictured above, left), provided a broad view of the trends for employers and HR leaders to keep in sight in the year ahead. These are summarised below.

Business and economic outlook

Secretary-General Ng noted the business environment can anticipate headwinds over the next 12 months, a sentiment which he said is “rather sobering”. This comes as, per NTUC surveillance, sectors such as advance manufacturing, electronics, and food manufacturing continue to face pressures. He added: “According to estimates, we recorded about a 1% growth rate last year, and this year we really hope to reach the higher end of the 1-3% that has been projected.”

Echoing SG Ng’s prognosis, Dr Yap said: “For businesses, uncertainty is creating a lot of challenges – especially when we talk about transformation, it takes time. Changing the mindset of the entire organisation takes time. We should all be shouting for proactive preparation for the uncertainty ahead.”

From the employers’ perspective, he noted that transforming and investing ahead are always a big challenge, especially for SMEs. “When times are good, you have no time to do that; when times are bad, you have no money to do that,” he quipped, with the key message being for employers to be agile and proactive in planning for change during both good times and tough ones.

Another point he made was around the grants rolled out by the Government to support the transformation of industries. He noted that the focus must not be on the number of grants provided, but in the effectiveness & efficacy of these grants – such that employers are able to use them successfully, and apply for reimbursements efficiently, especially for SMEs that often deal with cash flow concerns.

Uptrend in retrenchments and the impact of technology

Retrenchments, both leaders noted, are expected to continue. SG Ng explained: “Per the trend in 2023, the numbers are increasing, in part, due to the structural alignment of businesses into new areas of opportunity. Lower value-adding businesses are moving out of Singapore. So, NTUC expects retrenchments to be on the uptrend.”

He assured that NTUC will continue to put in proactive measures to talk to companies about potential retrenchments, with a view to coming up with a fair deal for the workers, as well as managing the potential psychological impact to those impacted.

Further, Dr Yap clarified that, in some cases, retrenchments could be taken as positive developments, as they are helping to make Singapore’s businesses more productive, more sustainable; while acknowledging that employers are always encouraged to use retrenchments as the last resort.

To better manage the issue of retrenchments, in Budget 2024, SG Ng called for proactive action to support displaced workers. He explained: “We should think about a transition support package, in the form of financial and/or upskilling/reskilling support for displaced persons seeking new opportunities in a more challenging environment.”

Further, highlighting the importance of technology, both leaders called upon employers specifically in sectors with strong reliance on labour, and those that have thus far been resistant to transformation, to take a step back and assess what they can do better, perhaps using automation, to reduce labour pressure.

In an example, SG Ng cited the effectiveness of the CTC grant which pairs technology & company transformation with worker outcomes. Employers strive to put in place a career development plan for the workers, or give estimates of the wage outcomes once the project is completed. “We have seen wage increases with the technology grant of being in excess of 5% in typical increases,” he shared.

For younger workers, SG Ng and Dr Yap collectively carried a simple message: Focus on building your skills. Identify professions where skills are needed, learn to work with productivity tools, and see how you can prepare better for future jobs.

Other forms of support called upon in Budget 2024

SG Ng urged all Singaporean workers, including Professionals, Managers, Executives (PMEs), to partner with NTUC to walk the journey of personal & career transformation. Complimenting this, SNEF, Dr Yap said, continues to encourage the formation of more Career Conversion Programmes (CCPs) as well as the rise of more ‘Queen Bee’ companies, which represent industry leaders with strong sectoral expertise, industry standing and ability to influence other companies in the landscape.

The Secretary-General also highlighted the conversation around better support for employees with caregiving responsibilities, such as those looking after aged parents or new additions to the family. The idea to ask for caregivers’ leave, he said, is to afford the space to caregivers to make a decent livelihood, while ensuring flexibility for businesses as well.

Caregiving employees are among the five worker segments that have been highlighted by NTUC for better support, the other four being the youth, mid-career workers, older workers, and vulnerable workers. In light of this, the conversation around implementing flexible work arrangements (FWAs) will continue being an important focus.

Finally, both leaders emphasised on the gains made by the Company Training Committees (CTCs), which equip workers with the necessary skills and resources to remain employable. Over 1,700 CTCs have been formed as of 31 October 2023, impacting over 123,000 workers.

As such, continuous focus on upskilling and reskilling will remain critical. As Dr Yap said: “When we come out of polytechnic or university, that it not the end; that is the beginning of the learning.”

Agreeing with the perspective, SG Ng added: “According to the NTUC doctrine, the best way to beat inflation and have a vibrant economy is for workers to have access to good jobs. We will see how to work with the Government make a bigger push in training.”

Forward outlook

In a message to PMEs: SG Ng shared: “Last time it was about technology impacting the skills quotient, now it is impacting the intellectual quotient.” As such, Dr Yap added: “All of us should be alert, agile, and ready to take advantage of the Year of the Dragon to transform for new and better things going forward,” while advising older PMEs to embrace new tools & technologies.

With the Budget 2024 announcement around the corner, SG Ng reminded the entire labour ecosystem to place optimism on the collective work that can be done together – in looking at the economic situation realistically, and collaborating to seize new opportunities, despite the challenging outlook.


ALSO READ: Singapore employers see training as most effective way of keeping mature workers employable

Photos / Journalist's own

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