Experts fear worst may be yet to come in S'pore job market
Published 11 hours ago
Layoffs, unemployment rate expected to rise further this year amid uncertain outlook
Sue-Ann Tan
https://www.straitstimes.com/singapo...-in-job-market
The worst may be yet to come on the employment front, experts said, following the release of preliminary figures yesterday that showed retrenchments more than doubled in the second quarter of the year.
They agreed that the job market has not bottomed out amid the uncertainty of the coronavirus pandemic, but that government measures have gone some way in mitigating the impact.
National Trades Union Congress assistant secretary-general Patrick Tay said in a Facebook post that he expects retrenchment and unemployment figures to continue climbing in the second half of the year, with an uncertain outlook across many industries.
He noted that besides small and medium-sized enterprises, large local enterprises and multinational companies are also impacted with delayed or reduced investments, curtailed production and freezes in global headcount.
"I am particularly concerned that the figures may not reflect the full impact of the (job losses) as I do see and hear of workers being contractually terminated (though with adequate notice pay), older workers not being re-employed, as well as foreign workers on work permit, S Pass and Employment Pass whose passes are not renewed. These do not count towards overall retrenchment numbers," he said.
OCBC Bank head of treasury research and strategy Selena Ling said the total and resident unemployment rates are also likely to rise further in the second half of the year. "Without the SGUnited Jobs and Skills programme, the local job market conditions would have likely deteriorated faster," she said. "However, the private consumption story is likely to remain muted, and business hiring plans are also tepid in tandem."
United Overseas Bank economist Barnabas Gan said headwinds in the tourism-related sector, the external environment and resurgence in Covid-19 infections in Singapore's key trading partners are among the factors that may impede economic growth.
"Given the slowdown, companies may continue to show reluctance in hiring while the pressure to retrench their existing workforce could also increase."
DBS Bank senior economist Irvin Seah said the labour market will continue to deteriorate, even though economic growth is likely to have hit the bottom in the second quarter. He expects the resident unemployment rate to peak at 4.2 per cent by the year end.
Business sentiment seems to have perked up after the circuit breaker, as about 17 per cent of companies polled by the Ministry of Manpower last month indicated intent to cut their headcount in the next two months, compared with 19 per cent in April and 21 per cent in May.
But Maybank Kim Eng economists Chua Hak Bin and Lee Ju Ye also noted that employment data is a lagging indicator, which means that the negative impact from the circuit breaker measures can show up in job losses in the third quarter.
"Locals could account for a larger proportion of the layoffs in the second half (of the year), as the job support schemes and wage subsidies expire in August," they added.
On retrenchments, Manpower Minister Josephine Teo told reporters yesterday: "We understand that companies are sometimes having to manage on many fronts and there will be occasions when they have not communicated as clearly to their employees.
"There will be occasions when it has caught the employees by surprise... and so our encouragement to companies is to make sure that you alert your employees early."
She added that firms that are in negotiations with the unions should not retrench staff before the talks are complete.
"I think the way in which this dreadful process is handled is critical. There has to be an understanding of the pressure that workers face, there has to be an understanding that we need to accord them dignity and respect."
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