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The laboured market
1. What do you think was the most significant event this week?
I am going to cheat a little and submit two stories for consideration. The first is media and property group Singapore Press Holdings (SPH) announcing on Monday that it will trim up to a tenth of its 4,182 staff over the next two years and consolidate two of its daily newspapers, The New Paper and My Paper, into a single, free English-language tabloid. The second is news that Singapore banks are hiring despite a slowing economy, with most vacancies in the compliance and information technology functions. Either story could legitimately stand on its own as a candidate for the most significant, but it is difficult to appreciate one without the other because both deal with the Singapore labour market.
2. Why is this a big deal?
Taken together, the stories paint a picture of a Singapore labour market where redundancies are growing and yet there are opportunities for those with the right skills. Full disclosure: SPH owns The Business Times. We typically avoid writing any commentary about our parent company because of obvious issues with potential conflicts of interest and objectivity. But it would be difficult to disregard a blue chip company cutting its workforce by up to about 420 workers over two years.
The SPH move adds to the growing body of data that suggests Singapore's slowing economic growth has trickled down to the labour market. But what is happening with the banks also shows how the labour market can be different for different people. Disruption - whether in the form of a business cycle, technology or regulation - giveth and taketh. The policy challenge is trying to close the gap between what businesses want and what existing jobseekers can offer.
3. Did you see it coming?
The news about bank hiring was not so much a surprise as an important reminder that there were nuances to the labour market. A lot of the recent discourse about jobs focused on layoffs, so it was interesting to learn that the banks were still adding headcount. As for SPH's staff downsizing, the news had leaked out a few days before the announcement, but no official confirmation before the Monday announcement. When SPH announced its full-year results just before the weekend, management told reporters that it could not discuss its plans until regulatory approval had been obtained. That hurdle was apparently cleared by Monday evening.
4. Should anyone be worried? Excited, maybe?
There are certainly reasons to be concerned, but the big picture is far from doom and gloom. Redundancies have been growing in Singapore over the past two years, with the number of redundancies per 1,000 workers rising to 7.4 in 2015 from 6.3 in 2014 and 5.8 in 2013. The absolute number of redundancies in the second quarter of 2016 was 4,800, about 48 per cent higher year-on-year. SPH is therefore not alone in facing difficulties.
However, overall unemployment in Singapore remains relatively low. Unemployment in June was an estimated 2.1 per cent overall and an estimated 3.0 per cent among residents only. As a comparison, at the height of the global financial crisis in 2009, unemployment was 3.0 per cent overall and 4.3 per cent among residents while redundancies reached 14.2 per 1,000 paid workers. The slope of the layoffs trend is therefore relatively mild even if the direction is undesirable.
The story of the banks suggests that there remain pockets of opportunities. The catch? Most of the hiring need exists in compliance and information technology; those vacancies may therefore offer only minimal respite to the overall labour market if the banks cannot find enough qualifying candidates among Singapore jobseekers.
5. What happens now?
For anyone in Singapore who is not a business owner, the strategy is obvious. Now is the time to suck up to the bosses.
But in all seriousness, given that hiring decisions tend to lag the actual economic cycle, the labour market could be a growing challenge in the year ahead. The banks' situation highlights the need to close the gap between available skillsets and what businesses want.