Budget 2023: Analysts hail moves supporting more inclusive hiring, but say more needs to be done

• Progressive Wage Credit Scheme co-funding support enhanced; fund to receive S$2.4b top-up
• Senior Employment Credit and Part-time Re-employment Grant extended to 2025
• New Uplifting Employment Credit to encourage employment of ex-offenders
• Enhancement of Enabling Employment Credit to support hiring of persons with disabilities

EVEN AS market watchers welcomed news of funds aimed at encouraging the hiring of senior workers, persons with disabilities and ex-offenders, they warned that more needs to be done to integrate these groups into the workforce. 

Finance Minister Lawrence Wong on Tuesday (Feb 14) announced that the government would be extending the Senior Employment Credit to continue providing wage offsets to companies that hire senior workers, as well as the Part-time Re-employment Grant, which encourages employers to offer senior workers part-time re-employment, other flexible work arrangements and structured career planning. 

Both schemes will be extended to 2025.

He also announced financial incentives to support persons with disabilities and ex-offenders. The Enabling Employment Credit will help cover a larger proportion of wages for persons with disabilities, and for a longer duration. The new Uplifting Employment Credit, on the other hand, is designed to encourage firms to employ ex-offenders through a time-limited wage offset.

Market watchers cheered the additional government support, noting that these segments are often overlooked. 

Kurt Wee, president of the Association of Small & Medium Enterprises, told The Business Times that these were important measures that put “money and help where (it is) needed”. 

“This will help sectors to sustain the employability of such workers,” he said.

Roger Loo, executive director, management consulting services (human resource advisory) at BDO Singapore, noted that the extensions were “timed perfectly”.

He said: “The rise of post-Covid hybrid flexi-work acceptance has made part-time re-employment (and) flexible arrangements more easily achievable.”

But Noel Goh, people and organisation rewards leader at PwC Singapore, told BT that while such schemes encourage companies to employ individuals from these groups, they do not necessarily prepare the workplace for them. 

“The vast majority of workplaces are not equipped to handle individuals who are different from the mainstream. That is what is missing,” he said, adding that if companies can tap the funds to “fix the workplace”, the schemes could prove successful.

He added that this would be a good opportunity for Singapore’s non-profit sector to work with the government.

“This is purpose-driven work, and the mission of the non-profit sector fits into this. (Non-profits) need to get involved and help workplaces transform, in terms of behaviour. This is a public-people partnership.”

Goh’s view echoes Wong’s. In his Budget speech, the minister said: “We also need dedicated efforts on the ground, through organisations like SG Enable, Yellow Ribbon Singapore and their community partners, as well as close cooperation with employers, to provide meaningful job opportunities for persons with disabilities and ex-offenders.”

For Victor Mills, chief executive of the Singapore International Chamber of Commerce, the hiring of seniors “makes absolute sense”. 

“It’s simply irrational to have an ageist approach. This is the government’s way of signalling to businesses to do the right thing,” he said, adding that “there is still a long way to go” even as progress was being made. 

Similarly, Singapore Manufacturing Federation president Lennon Tan said the added support for the employment of workers from these groups will encourage the organisation’s members to continue promoting diversity in their workforce. “Our members would like to urge the government to consider further avenues, such as encouraging more progressive human resource policies for companies in the form of (enhancing) medical support for senior workers and persons with disabilities.”

PwC’s Goh added that the move to make employing seniors more attractive was not surprising, given that one in four in the population will be older than 65 by 2030. 

“What would really help is if companies can increase the productivity of senior workers. They need reskilling and upskilling, and that is missing,” he said. 

Separately, Wong also announced that the government will raise its co-funding share of the Progressive Wage Credit Scheme (PWCS). 

The PWCS was introduced at last year’s Budget. It provides transitional wage support for employers to adjust to upcoming mandatory wage increases for lower-wage workers covered by the progressive wage and local qualifying salary requirements. 

Wong said the government will be maintaining the enhanced co-funding share, which it raised in 2022 from 50 per cent to 75 per cent for the first tier of support; under this, the PWCS co-funds the wage increases for resident lower-wage employees with gross monthly wages of up to S$2,500.

Under the second tier covering workers with a gross monthly wage ceiling of more than S$2,500 and up to S$3,000, the enhanced co-funding (also raised in 2022) will go from 30 per cent to 45 per cent this year.