Labour shortage threatens Singapore’s economic growth
Recent jitters over how Singapore will cope with the current myriad of economic challenges it faces, including Brexit, the slowdown in China and weakened global demand, have led to a cut in the economic growth forecast for the nation.
The most recent growth estimate stands at 1% to 2%, down on an earlier estimate of 1% to 3%. But Singapore’s economy, which is heavily trade-reliant, is also facing domestic threats.
Earlier this year, Ravi Menon, the chief of Singapore’s central bank, announced that a labour shortage was the country’s biggest challenge for economic growth.
More jobseekers, less jobs
In 2014, the number of job vacancies in Singapore was at a record high. But recent figures from the Ministry of Manpower have revealed that, for the first time since 2012, the number of vacancies has fallen below the number of jobseekers. So what has caused this tumult in the labour market and how does the government intend to curb it?
Several factors have contributed to the downturn in figures. Long-term unemployment figures have slowly risen and redundancies were up in the first six months of 2016, compared to the same period in 2015. Static employment figures also imply that companies are reducing headcount.
Some analysts believe the roots of this most recent labour crisis can be traced back to a crunch on foreign workers five years ago. In 2011, growing political disquiet about immigration led to restrictions on overseas workers, who were blamed for taking jobs and lowering wages. As a result, the number of foreign workers was cut by two-thirds over three years — totalling just 24,000 in 2014.
Others argue that the imbalance stems from the changing nature of employment as an increasing number of firms seek to take greater advantage of automation and robotics. This is making some businesses more efficient in terms of labour and cost.
Several food and drink establishments have begun to use robots to ferry plates between customers and kitchens. Hotels and retailers are also among those looking to "employ" robot workers as many highly educated locals shun the late hours and unglamorous work.
The increase in robot workers and funding for development and deployment of robots is causing fears that manpower is more an economic challenge than a necessity. This is particularly prevalent as wage pressure in high-skill industries continues to outpace wage pressure in low-skill industries. Many companies are also choosing to absorb wage pressure themselves amid low profits.
Help is on the way
It’s easy to assume an autonomous workforce will only exacerbate the number of jobseekers in the country, but this is where improvements to better match candidates to jobs are coming into play. The reported mismatch of talent for available jobs in Singapore, whereby jobseekers in the country do not possess the specific skills required by employers, is being curbed by schemes such as SkillsFuture.
The Ministry of Manpower is also furthering ways jobseekers can find work, starting with its online Adapt and Grow Virtual Career Fair (AGVCF). The two-week online job fair took place in September and featured 51 employers with over 500 vacancies up for grabs. The fair garnered over 1,000 applications and 400 web chats. Attendees didn’t even need to leave their houses to meet the industry professionals helping them to further their career opportunities. Manpower minister Lim Swee Say describes the online offering as a “cheaper, faster and better” version of physical career fairs (although the AGVCF did have a physical counterpart for one day).
It has been stressed that Singapore must continue with the lengthy economic restructuring process or become increasingly reliant on foreign workers while being unable to provide the types of careers Singaporeans want.
The government is doing its bit to introduce skills training and innovative job fairs, while simultaneously keeping an eye on specific industry requirements. In the final quarter of last year, the bulk of layoffs came from the food, beverage and retail industries, and so the government has introduced two transformation plans specifically aimed at these industries.
But it warns that it can’t act alone and employees must be proactive and willing to adapt too if Singapore’s labour shortage is to be contained.