Government-funded caregiving leave can help level the playing field for SMEs as employers

THE labour movement’s recent suggestion of statutory paid caregiving leave would be an important step in improving worker welfare and should be taken seriously, as Singapore’s rapidly ageing population means that employees’ caregiving responsibilities will only rise.

Unsurprisingly, however, employers have seemed resistant to the idea. Few would disagree with the benefits of paid family leave for employees. Yet making such leave mandatory, without financial support from the government, would add to business costs in an already tough environment.

In recent years, most companies have already had to deal with elevated inflation and rising interest rates that have driven operating costs higher. In addition, having to give employees additional days off would be a further operational constraint amid an already tight manpower situation.

Some observers have noted that if companies are forced to shoulder the cost of additional paid leave, this could spur them to turn to alternative sources of manpower, including outsourcing certain job functions.

Yet, consider that more employers in Singapore are in fact recognising the need for paid caregiving leave. The proportion of employers offering this doubled to 30 per cent last year, from 15 per cent in 2012, according to data from the Ministry of Manpower.

Most of these companies are likely larger corporates or multinational corporations with more progressive human resource practices. In contrast, small and medium enterprises (SMEs) already struggle to attract talent for a variety of reasons. Their inability to provide caregiving leave would only disadvantage them further as employers.

This is why making family care leave mandatory would go some way towards levelling the playing field for attracting talent – but only if SMEs are given adequate financial support.

The government could consider a tiered approach: fully funding this for SMEs and offering only partial – if any – support to the rest, since many larger companies already provide some form of family care leave. Such an approach would keep a lid on the costs of such a policy, while ensuring the economy reaps the benefits of improved worker welfare.

Detractors might still ask if this is a suitable use of government resources. Yet the cost of funding caregiving leave needs to be weighed against, for instance, the benefit of helping to keep caregivers in jobs. This is important not just in the face of short-term labour market tightness, but also the long-term demographic trend of an ageing population and shrinking workforce.

Offering government-paid statutory caregiving leave also addresses an issue of equity, since Singapore already has government-paid statutory childcare leave.

Childcare leave might be considered as a recognition, by the state and employers, that looking after a child does require a worker to take time off. Yet, this benefit is enjoyed by only a subset of the population, since not everyone has a child.

In contrast, almost everyone has ageing parents. Looking after parents can be particularly challenging for older singles, who may not have an extensive network of support.

If government-paid childcare leave can be seen as official support for having children, government-paid caregiving leave would in turn be a statement of solidarity from the state. Even if their ageing parents are healthy, workers could use this leave entitlement to spend time with their families – an outcome that is well-aligned with Singapore’s encouragement of family care and active ageing.