In the just-launched Labour Market Report Second Quarter 2019 by Singapore's Ministry of Manpower (MOM), trends suggest that employers are retaining their existing workers despite economic headwinds.
This is attested to by the numbers which show that retrenchments were lower (2,320 in Q2 2019) than the previous quarter (3,230 in Q1 2019), and a year ago (3,030).
The decline in layoffs was broad-based, but in particular electronics. There were fewer retrenchments among production & related workers (1,350 to 340) and clerical, sales & service workers (440 to 290); but layoffs among professionals, managers, executives & technicians (PMETs) rose from 1,440 to 1,680.
As such, the majority of retrenchments in Q2 2019 were from services (72%), led by wholesale trade (19%), financial services (17%) and professional services (11%). Restructuring and reorganisation remained the key reason cited by establishments for retrenchments.
NTUC Assistant Secretary-General Patrick Tay has analysed the trends: "For the first half of 2019, despite the current global trade tensions, we did not see a huge spike in retrenchment figures compared to the same period last year but there is a weakening of the labour market.
"I expect companies and businesses to be more conservative and cautious, especially in hiring in the latter half of 2019 with the continued US-China trade tensions. We will continue to see different measures undertaken by companies in different industries as they cope with the global trade crisis while managing transformation and technological disruption."
Data relating to this trend is reflected in the below infographic:
Given that there were fewer retrenchments across major industries in Q2 2019; the report found that instead, more employees were placed on short work-week or temporary layoff.
Due to the rise in utilisation of this feature, the report included a technical note on the phenomenon, stating that the number of employees placed on short work-week or temporary layoff is usually read as an indication of economic slowdown.
Key pointers from the technical note on short work-week and temporary layoff:
- Short work-week is a temporary work arrangement where an establishment reduces its employees’ work, either in terms of the number of hours each day or the number of working days per week. This is usually due to poor business.
- Employees are in such a work arrangement involuntarily due to a lack of sufficient work. They should not be confused with employees who request to be on regular compressed work-week or part-time work arrangements.
- An employee is temporarily laid off when he/she is asked to stop coming to work for a short period due to lack of work.
- Both retrenchments and temporary layoff involve a total suspension of work due to the firm’s lower labour demand, but with distinct differences.
- In the case of retrenchments, workers are permanently terminated and cease to be employees of the firm. This could be a result of several reasons beyond poor business. On the other hand, temporary layoff is an interim measure to cut labour cost because of a lack of sufficient work, on the premise that employees are able to resume work when business picks up again.
- These temporary arrangements are viewed as better alternatives to retrenchments, as they do not completely take away employee benefits, and serve as an indication of the company’s commitment to its employees.
Among the other highlights of the report are:
- Hiring sentiments have turned cautious. The number of job vacancies declined for the second consecutive quarter. The re-entry rates among retrenched residents declined. As the resident unemployment rate inched up, there were fewer job vacancies than unemployed persons for the first time since December 2017.
- The seasonally-adjusted unemployment rate rose for residents (from 3.0% in March 2019 to 3.1% in June 2019) and citizens (from 3.2% to 3.3%), as more persons entered the labour force. The unemployment rate was unchanged at the overall (2.2%). Most were able find work within six months, as the seasonally-adjusted resident long-term unemployment rate was unchanged at 0.7% in June 2019.
- Total employment (excluding foreign domestic workers, or FDWs) increased by 6,200 in the second quarter of 2019, similar to the growth a year ago (6,500). The bulk of employment growth was in services (5,400, excluding FDW), although the growth in the sector was at its lowest since the third quarter of 2016.
- The six-month re-entry rate among retrenched residents declined to 60% in the second quarter of 2019, after trending up in the preceding two quarters.
- The number of job vacancies (seasonally-adjusted) declined for the second consecutive quarter, from 57,100 in March 2019 to 47,700 in June 2019. As a result, the seasonally-adjusted ratio of job vacancies to unemployed persons dipped to 0.94 for the first time since December 2017.