Some 6,100 workers lost in Q1, but unemployment stays near record lows
By Joanna Seow And Olivia Ho, The Straits Times, 16 Jun 2015
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THE job market shed workers for the first time in six years, strangled by a tight foreign worker policy and slow growth.
By Joanna Seow And Olivia Ho, The Straits Times, 16 Jun 2015
Employment for the first three months of the year contracted in every sector - manufacturing, services and construction - signalling that segments of the economy may be relying less on labour or not expanding fast enough to demand more workers.
Employment fell by 6,100, as at the end of March, according to the latest official figures from the Ministry of Manpower (MOM), bringing the total number of workers here down to 3,617,800. The last time the economy saw such poor job market performance was in the second quarter of 2009, when 7,700 workers were lost.
But even as employment contracted, unemployment, at 1.8 per cent, stayed near record lows while vacancies remained near all-time highs, said the report released yesterday. The seasonally adjusted unemployment rate for citizens dipped to 2.6 per cent, or around 50,200 people, compared with 2.7 per cent last December.
Economists said this paradox - shrinking employment in a tight labour market - is partly the result of falling numbers of workers in the economy.
"You can have a job opening but you have to have someone to actually fill the position for employment numbers to go up," said Assistant Professor Walter Theseira of Nanyang Technological University.
DBS economist Irvin Seah also pointed to the restrictive foreign worker policy, noting that it has restrained companies from hiring people they need.
With the economy pushing the limits of labour force participation, it is harder than ever for employers to offer wages or jobs that would attract still more locals to work or look for work. But while this could continue to push wages up and keep unemployment low, economists also warn that, should the trend continue, companies could start to suffer, which could have an impact on growth itself.
The decline in employment was led by the services sector, which saw a 90 per cent drop in the number of additional workers employed, the MOM report said.
Demand for labour also slackened in some industries. Weak output growth in marine and offshore engineering and the completion of chemical maintenance projects resulted in 6,900 fewer people employed in manufacturing in the last quarter.
Demand for labour also slackened in some industries. Weak output growth in marine and offshore engineering and the completion of chemical maintenance projects resulted in 6,900 fewer people employed in manufacturing in the last quarter.
MOM said apart from industry-specific factors, the contraction "may be reflective of how segments of the economy could be transiting to be less manpower reliant". Economists noted that it was too early to say whether there was cause for alarm.
The report also showed layoffs were slightly lower than in the previous quarter. In the first quarter of the year, 3,500 workers lost their jobs, compared with 3,910 in the fourth quarter of last year. The majority of residents - nearly three in four - laid off were professionals, managers, executives and technicians.
SIM University economist and Nominated MP Randolph Tan said that the labour market is adjusting, with employers being more discerning about who they hire.
"Any worker they hire from now on must be assessed on how much they contribute to the bottom line," he said.
The labour market remained tight in the first quarter of 2015, as the unemployment rate trended lower amid fewer...
Posted by Singapore Ministry of Manpower on Sunday, June 14, 2015
Fewer jobs because firms relying on fewer workers
Stricter foreign labour rules make companies change way they work
By Joanna Seow And Olivia Ho, The Straits Times, 17 Jun 2015
Stricter foreign labour rules make companies change way they work
By Joanna Seow And Olivia Ho, The Straits Times, 17 Jun 2015
THE tight foreign worker policy may finally be working through the wider economy, with companies relying less on labour and changing the way they do business.
Bosses told The Straits Times that the lack of manpower means they are having trouble filling vacancies and cannot take on new contracts. Others have restructured some processes in order to manage.
This struggle was borne out in Monday's labour market report, which showed that total employment in Singapore shrank by 6,100 in the first three months of the year.
This was the first time the job market contracted since 2009, according to the Manpower Ministry.
Besides slowing growth in the local labour force, economists pointed to the tightness in foreign workforce policy as a possible reason for the fall in total employment.
The Government tightened policies on foreign workers from 2010, with the goal of weaning companies off the supply of cheap foreign labour.
The signs have been encouraging. Last year, annual growth in foreign employment moderated to 2.4 per cent, down from 4.6 per cent in 2013 and 6.8 per cent in 2012.
"If employment continues to contract and the economy is still growing, productivity growth may turn positive," said Singapore National Employers Federation executive director Koh Juan Kiat.
"If employment continues to contract and the economy is still growing, productivity growth may turn positive," said Singapore National Employers Federation executive director Koh Juan Kiat.
"It may also reduce our reliance on foreign workers."
Employers said they are facing stiff competition for foreign staff.
"It's taking a longer time to fill vacancies," said Ms Serene Tan, director of department store chain BHG. For example, she said, information technology staff and managerial level roles take up to six months to fill, compared with two to three months in the past.
But vacancies, which fell slightly in the first quarter of the year from a record high, could slip further as companies change their hiring patterns.
"Businesses are pacing themselves for the medium to long term," said Association of Small and Medium Enterprises president Kurt Wee, adding that he had seen a slowdown in the number of jobs offered in the last two or three months.
Bosses also reported being unable to take on new business.
At Tian San Shipping, which has cut foreign hires by about 70 since 2009, senior manager of operations Chin Tze Chung said: "We can't even undertake some tenders because we don't have the manpower."
Some smaller companies, such as subcontractors in the construction industry, close down when they are unable to fulfill their existing contracts.
Others are considering moving operations to other countries where labour is more accessible.
Mr Kelvin Ho, managing director of freight forwarding firm Intercontinental Logistics, said a lack of foreign labour is forcing out many of the factories he relies on for business.
"If factories are not coming to Singapore, we might as well close down," he said, adding that he is considering moving the company to somewhere like Jakarta or Vietnam, where hiring would be easier.