Interestingly, ‘reorganisation/restructuring’ was a common reason cited for retrenchments for both Q4 2021 and the full year 2021, MOM shared. In 2020, these were mainly due to ‘recession/business downturn’ as cited by employers.
Amidst a global Omicron surge, Singapore's economic growth picked up momentum in the fourth quarter of 2021, maintaining a steady recovery trajectory. Several other key findings were also observed as part of the Labour Market Advance Release 2021, recently released by the Ministry of Manpower (MOM).
Substantial total employment growth in Q4 2021 attributed to both residents and non-residents
Resident employment continued to expand at a faster pace compared to the preceding quarter. Concurrently, non-resident employment saw growth for the first time in eight quarters. As a result, total employment grew substantially by 47,400.
Part of the increase in resident employment reflects seasonal hiring due to the year-end peak period in F&B services and retail trade, MOM noted. In fact, employment in these sectors grew for the first time after consecutive quarters of declines, seeing that both had been experiencing employment declines in both Q1 2021 and Q2 2021.
At the same time, resident employment continued to grow steadily in outward-oriented sectors such as information & communications and financial services. Growth in the information & communications sector could possibly be attributed to strong demand for IT and digital solutions, as well as robust games and software publishing activities, MOM shared. Meanwhile, the financial services sector was also bolstered in part by fund management activities.
Non-resident employment saw a particularly considerable increase in the construction sector, in part due to the resumption of entry approvals for fully-vaccinated CMP workers entering the country in early November. However, the non-resident workforce in other sectors was relatively flat, after consecutive quarters of decline.
Per MOM's update, the non-resident employment expansion in the final quarter was not sufficient to make up for the declines in the first three quarters. As such, for the full year 2021, non-resident employment is expected to contract, though at a much slower pace than in 2020. This smaller decline, coupled with stronger resident employment growth, is expected to result in a rebound in total employment, compared with the contraction of 166,600 in 2020.
Unemployment situation continued to improve, with unemployment rates expected to decline to pre-COVID levels in the months ahead
A 0.1%-point decline was observed for both the overall (from 2.5% to 2.4%) and citizen (from 3.5% to 3.4%) unemployment rates in December 2021. On the other hand, the resident unemployment rate remained unchanged at 3.2%.
While still above pre-COVID levels, the annual unemployment rates showed significant improvement in 2021:
- Overall: from 3.0% to 2.6%;
- Resident: from 4.1% to 3.5%; and
- Citizen: from 4.2% to 3.7%
Retrenchments are expected to remain low
Retrenchments were noted at 1,300, and are also expected to have declined further in Q4 2021. On a larger scale, retrenchments declined significantly over the year - from 26,110 in 2020 to 7,820 in 2021. Interestingly, ‘reorganisation/restructuring’ was a common reason cited for retrenchments for both Q4 2021 and the full year 2021, MOM shared. This was different from 2020, when retrenchments were mainly due to ‘recession/business downturn’ as cited by employers.
Looking into retrenchments over the year per sector specifically, construction, manufacturing, and services experienced a considerable decline. This was most significantly so in the services sector, which saw a sizable number of layoffs back in 2020 – particularly in consumer-facing, aviation- and tourism-related industries such as retail trade, arts, entertainment & recreation, and air transport services.
Overall, Singapore's labour market is expected to continue to improve in 2022, driven by an overall easing in domestic COVID-19 restrictions and the resumption of international travel. However, recovery to the pre-COVID state continues to be uneven across sectors, and uncertainty remains over the trajectory of the virus.
In a Facebook post, Member of Parliament and Assistant Secretary-General of NTUC, Patrick Tay, commented on the findings: Moving into 2022 and ahead, I expect to see a more positive labour market with improving unemployment rates and with retrenchments kept low. This is with the caveat that many businesses are and will be undergoing digital transformation, reorganisation, restructuring and re-strategisation which may impact roles whilst spiking demand in new skill areas."
Senior Minister of State for Manpower Koh Poh Koon also expressed his thoughts in a Facebook post: "The Government and our tripartite partners will continue to support employers and employees to adapt as the global economy and businesses restructure, so that we can sustain the labour market recovery in the coming year."