Employers divided over re-hiring perks

Business chamber chiefs say success of planned govt measures depends on employees' ability and willingness

Published Sun, Oct 5, 2014 · 09:50 PM


INDUSTRY players have mixed views on the effectiveness of planned government incentives in spurring the hiring of older workers in Singapore's private sector, The Business Times has found out from interviews last Friday with several business chambers here.

This follows an announcement earlier last week by the Ministry of Manpower (MOM) on its intention to introduce an incentive package by the beginning of 2015 to encourage companies to extend the retirement age of workers to age 67 from 65, prior to legislation kicking in at a later date - a move which the public sector has already committed itself to.

"I honestly don't think we should be dishing out subsidies for employers to hire an older workforce - that's discrimination," said Singapore International Chamber of Commerce (SICC) chief executive Victor Mills. In his view, companies should instead be hiring based on talent - a broad brush that paints an individual's character, values, skillset and performance.

"If a 60-year-old has the same skills as a 30-year-old, and they are performing more or less satisfactorily, they should be remunerated the same," he said.

Age discrimination, according to Mr Mills, is not unique to Singapore. In any other society, perhaps, employers might need some incentives to encourage the hiring of older workers. But "do we need incentives to encourage this when the labour market is so tight"?

Instead, we should encourage people to remain in the workforce as long as possible, he said. "Singaporeans shouldn't be fussy about age - any more than they should be fussy about race."

He added: "I have never discriminated on age or on any other obvious characteristics. I discriminate on their values and their ability to deliver. That's how I hire."

The government has done enough, in his opinion; now, society needs to play its part.

The chief operating officer of the Singapore Business Federation (SBF), Victor Tay, agreed that the tight labour market ought to do the trick. "Every single local headcount is important, as that's what gives the enterprises the dependency ratio to retain foreign workers," he said, referring to the government's foreign worker quota limits.

But that sentiment isn't shared by all. In the cosmopolitan city-state of Singapore, certain forms of government intervention are still welcomed by some.

According to the president of the Singapore Chinese Chamber of Commerce & Industry (SCCCI), Thomas Chua, the government should help employers reduce their cost burden of accommodating senior workers, particularly in medical and process-restructuring expenses. He added that SCCCI would help companies avail of these government incentives.

Further wage supplements and professional career counselling services specifically for the senior workforce might also come in handy for small and medium- sized enterprises (SMEs), said Kurt Wee, president of the Association of Small & Medium Enterprises (ASME).

"Imagine if you've been in a managerial role for a large part of your career, but in very different circumstances right now - it can be very challenging," he says, rooting for the government to provide professional third-party counsellors to better communicate expectations between employees and employers - an area which resource-tight SMEs might not have the capacity to independently deliver.

But further issues in hiring a senior workforce might only surface after the scheme has been implemented for some time, said Mr Wee. After a few years, it should be reviewed to decide whether incentives or even legislation should remain.

This recent announcement by MOM comes after the ministry accepted recommendations from the Tripartite Committee on Employability of Older Workers to promote the extension of worker's age ceiling through incentives, prior to implementing legislation.

Last Monday, the ministry also announced that it was teaming up with tripartite partners and the Ministry of Finance to introduce an incentive package next January to encourage more companies to voluntarily come on board.

But carrots and sticks aside, there is consensus among industry players that it really all boils down to whether senior workers are willing and able to work.

It is more important to establish the desire of both employers and employees to extend the retirement age before a more in-depth exploration of incentives, said the president of the Design Business Chamber Singapore, Tai Lee Siang.

Mr Tai, who is also the group managing director of Ong & Ong, said there are a fair number of staff beyond the age of 65 at his architecture consulting firm. "The motivation is often not fiscal or policy incentives. The most important factor to consider is striking a win-win situation for both employer and employees . . . Employers must therefore be prepared to be flexible to allow adjustment of work scope."

While the role played by the employer is significant, it is also limited. Ultimately, it takes two to tango.

SMEs in Singapore will hire regardless of age as long as the productive capacity is there, says ASME's Mr Wee. But once workers hit the age of 60, they generally face medical issues quite frequently.

"If you are willing but not able, it's a problem. If you are able but not willing, it's also a problem . . . if you have only one factor at hand, it's difficult," he said.

According to SBF's Mr Tay, even at age 62 (three years short of the current legislated retirement age), there are quite a few managers and professionals who have retired, despite SBF's policy to hire and re-employ those over 62. Nationwide, household incomes have collectively gone up and increasingly affluent Singaporeans "don't want to see their seniors, who are typically their grandparents and parents, work too hard".

"For this to continue, it takes two hands to clap - the (senior workers) themselves must be willing to continue," said Mr Tay. "Sixty-seven years is just an arbitrary (retirement) age, as long as they are able to contribute."

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