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Digging deeper into deep skills and how to acquire them

Singapore must address skills mismatching, says OCBC Bank’s Head of Treasury Research & Strategy, Selena Ling

A STUDY by the Organisation for Economic Co-operation and Development (OECD) on “Getting Skills Right: Assessing and Anticipating Changing Skill Needs” found that skill mismatches and shortages are common in advanced economies – and the costs of persistent mismatches are substantial and can constrain the ability of firms to innovate and adopt new technologies, reduce labour productivity, and contribute to structural unemployment.

However, addressing skills mismatches requires having good information on current and future skills needs, and understanding the limitations of current skills upgrading efforts. 

For Singapore – where skills supply is not keeping pace with demand particularly among PMETs in certain sectors – success in narrowing the skills gaps could mean a more dynamic economy, as well as improve the employability and competencies of workers.

However, various challenges may exist at the policy, institutional and micro level. These include how to improve access to training, responsiveness and relevance of skills, and the costs, delivery and the quality of skills.  

For individual workers, there is also the inertia or complacency that needs to be overcome. Companies and workers need to have a fundamental mindset shift to see lifelong learning and continued skills training as a way of life rather than a costly and optional choice – ie a must-have rather than a nice-to-have. This will enable Singaporean workers to adapt, evolve and succeed even as the economy and jobs transform over the next decade.  

Some policy headway has been made. The SkillsFuture movement launched in end-2014 provides a headstart, coupled with the SkillsFuture Earn and Learn Programmes, and other key initiatives such as the Professional Conversion Programme and Career Support Programme. 

Moving forward, the CFE recommends building on the current momentum to help Singaporeans acquire deep skills in a timely and accessible manner through modularised and technology-enabled training programmes that can be combined to build up to higher qualifications, and strengthen the links between skills acquisition and utilisation.  

To these ends, the CFE proposes that an online one-stop education, training and career guidance portal be set up through the SkillsFuture Individual Learning Portfolio (ILP), and that the government support company-led place-and-train schemes in firms throughout the value chain.  To minimise information gaps, the National Jobs Bank would need to be enhanced, and integrated with the ILP platform. 

Expanded and effective collaboration between all stakeholders is key to success in this skills journey. The CFE cites the need to expand the role and ownership of employers for skills utilisation, and suggests replicating the model of the SkillsFuture TechSkills Accelerator (TeSA) programme, which currently supports the ICT profession and emerging industry areas like data science and cybersecurity, to other growth sectors such as urban solutions. 

To encourage companies to take a bigger role to build up leadership and HR management capabilities, they could leverage on the SkillsFuture Mentors Programme and the HR Capability Toolkit. To provide greater impetus, there could be incentives for “employers of choice” and showcasing of best hiring and HR practices at industry and company levels. 

Another suggestion could be to set up sector-specific skills councils, like those in Canada and the UK, or independent bodies such as national skills advisory groups like those in Denmark, Finland and Germany, as potential mechanisms to improve coordination.

The government could also take the lead in various areas. The public sector has already moved to allow non-graduates to fill positions previously open only to graduates by merging graduate and non-graduate schemes and removing divisional classifications. 

To walk the talk on encouraging and enabling the hiring and advancement of workers based on skills and competencies, the recruitment criteria for all civil servants, including the Administrative Service, could similarly progress beyond academic qualifications.

With digital disruptions and the emergence of the “sharing economy” and “gig economy”, more structural and cyclical interruptions may be in store for the Singaporean worker, whether rank-and-file or PMETs. 

To start, there may be a need to accelerate the realignment of the tertiary education focus to encourage greater student participation in selected growth industries and to provide more timely job matching and career services.  

For workers facing job dislocations, they would welcome enhanced financial and other forms of assistance to help undertake necessary training to switch industries and/or enlarge existing job scopes. In particular, we have to recognise that voluntary unemployment to reskill for a new job or new industry is extremely costly for PMETs, and relevant work-based training does not come cheap. 

There is probably also scope to relook at some form of unemployment assistance for a limited period, possibly coupled with a loosening of CPF funds usage for some co-sharing of risks to avoid moral hazard issues, to assist displaced workers during such transitions.    

Our labour participation rate currently stands at 68 per cent, but only 5.9 per cent of people employed are aged above 65 years. In comparison, the labour participation rate in Switzerland is similar at 68.9 per cent, but 11.8 per cent of Swiss people aged above 65 years are able and willing to work or currently working. 

Iceland, New Zealand and Sweden also lead in a PWC Golden Age Index, which measures how well 34 OECD countries are harnessing the power of their older workers – the study estimates that the OECD countries could add around US$2.6 trillion to total GDP if these economies could increase their full-time equivalent employment rates among people aged 55 to levels matching Sweden's, and the potential GDP boost ranges from 0.8 per cent points for Norway to 5.8 per cent points for the UK. Imagine the potential tangible and intangible benefits from more active and working seniors in the Singapore economy. 

From July 1, 2017, Singapore’s re-employment age will be raised to 67. We can definitely look forward to more active participation of healthy elderly Singaporeans in the local labour market.  Sustained government support to encourage the employment of older workers is necessary as a signalling effect. 

The Special Employment Credit (SEC) already provides a wage offset of up to 8 per cent of monthly wages for hiring Singaporean workers aged 55 and above, and not earning more than S$4,000 (with an additional wage offset of up to 3 per cent for those aged 65 and above). 

But to go beyond that will require mobilising people to help one another so the elderly can live well and independently for longer, stay connected and have a sense of wellbeing, as well as providing purposeful and enjoyable work in the latter half of their lives.
This is where the government, organisations and the community need to work closely to improve the opportunities for elderly Singaporeans to work flexibly and part-time rather than full-time, as well as provide mentoring and job training to new workers, and strengthen the support infrastructures for working later in life, including more training in areas such as digital skills.

  • The writer is head of treasury research & strategy at OCBC Bank

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