Singapore Budget's focus expected to be on manpower issues

Singapore

THE virus outbreak will put immediate attention on helping businesses retain jobs as the economy takes a hit, but the Budget is still expected to have its focus firmly on Singapore's long-term manpower needs.

Deputy Prime Minister Heng Swee Keat was always going to have his work cut out for him when it comes to manpower issues that the Budget will have to tackle, but the virus outbreak now means those issues will take centre stage.

On Sunday, he said he will announce on Tuesday's Budget Day wage support to help companies preserve jobs for local workers as Covid-19 continues to evolve rapidly.

Wage support for local workers is part of a set of broad-based measures to support viable companies and help workers stay in their jobs, he said.

Before the virus outbreak, employers and workers were already looking to this year's Budget to help them as the economy continues to grapple with manpower issues.

Last year's Budget tightened foreign worker quotas, while plans are under way to gradually raise the retirement and re-employment ages. The impact of both policies on business costs and operations could be soothed in this Budget, some hope.

Watchers also expect more support to be unveiled for professionals, managers, executives and technicians (PMETs), especially those who are older or at risk of losing their jobs.

Manpower Minister Josephine Teo recently hinted as much, when she said that "fair and exemplary" bosses will get more help in the Budget.

"Those who make upskilling their employees, as well as hiring and retaining older workers, a key part of their business and workforce strategy can look forward to a boost in government support," she told employers at an industry event on Valentine's Day.

Dilys Boey, EY's people advisory services leader for Asean, has suggested that the Budget offer sweeteners for companies to redesign jobs and invest in older employees' skills.

Incentives could include continued funding support for sector-specific job redesign efforts, such as through consultancy grant support or transitional manpower support, she said. The government could also dangle higher salary support for these workers during their training.

There's also no ignoring the 22 recommendations from a Tripartite Workgroup on Older Workers, which were all accepted by the Singapore government last year.

Some proposals were for structured career planning sessions, job redesign, and part-time re-employment. Martijn Schouten, people and organisation leader for Singapore at PwC South East Asian Consulting, said that support for such measures could be increased in the Budget.

Specifically, said Randstad regional managing director Jaya Dass, there could be more funding for initiatives like WorkPro, which gives grants for projects like job redesign.

Mark Teoh, from Deloitte's human capital consulting team, also suggested matching old and young workers to drive skills and knowledge transfer.

Meanwhile, the Singapore Business Federation and the Singapore National Employers Federation (SNEF) both urged the government last month to extend Special Employment Credit subsidies for older workers' wages, while the SNEF also suggested re-introducing the Temporary Employment Credit as Central Provident Fund contribution rates go up.

Matthieu Imbert-Bouchard, managing director at recruitment firm Robert Half Singapore, called "PMETs who have not evolved their technical capabilities, skills and qualifications to keep pace with the rate of digital change" a vulnerable group to being made redundant.

DBS senior economist Irvin Seah, who has been vocal in his concern about PMETs' job prospects, told The Business Times over the phone that tax breaks or wage subsidies could help businesses with staff costs and incentivise worker retention.

For example, the Professional Conversion Programmes for mid-career workers - where the government pays up to 90 per cent of place-and-train employees' monthly wages and course fees - were recently expanded for the electronics industry. More spaces were opened up for PMETs, alongside a brand-new scheme for rank-and-file electronics operators.

Similar enhancements could be extended to cover more industries, said Mr Seah, who also wrote in a report that companies could get tax breaks as an incentive to hire laid-off PMETs.

Similarly, Citi analysts Kit Wei Zheng and Ang Kai Wei have suggested in reports that the government could turn to wage subsidies, "lowering unit labour costs and saving jobs".

On the other hand, curbs on foreign manpower are unlikely to touch higher-wage Employment Pass (EP) holders, watchers predicted - despite moves in last year's Budget to tighten the hiring quotas for foreign workers, including mid-skilled S Pass holders.

In fact, "increasing the minimum salary requirement for EP holders may put an added strain on companies, given the muted economic growth in 2019", EY's Ms Boey noted.

Mr Imbert-Bouchard called the economic need for high-skilled foreigners "a simple matter of supply versus demand", especially in the technology field.

Until that gap can be plugged with local graduates, "facilitating the entry of global tech talent will help alleviate this pressure as they can provide a solution for companies who can't find the talent they need locally", he said.

Minister for Trade and Industry Chan Chun Sing earlier signalled in Parliament that Singapore needs "a balanced approach to our talent strategy".

"Too many foreign workers, and not necessarily just the lower skilled one - our local workforce feels overwhelmed. Too few, our local enterprises and workers are unable to achieve scale or competitiveness for the global market," he said on Feb 4.

In the meantime, Ms Dass suggested more funding for schemes like TechSkills Accelerator, plus the Capability Transfer Programme, which supports the transfer of skills from foreign specialists to local trainees.

That's because "the immediate solution is to widen the talent pool by increasing the workforce participation rate in these new growth areas".

READ MORE: BT Infographics: Budget journey