Singapore’s re-entry rate of retrenched workers down, job vacancies up in Q1
Rate falls to 59.4 per cent in Q1, from 61.5 per cent the previous quarter
FEWER retrenched residents in Singapore are finding work within six months, while the number of job vacancies in Singapore continued to climb in the first quarter of 2024, indicated the Ministry of Manpower’s (MOM) Labour Market Report on Thursday (Jun 20).
The rate of re-entry fell to 59.4 per cent in Q1 from 61.5 per cent the previous quarter. Meanwhile, job vacancies grew to 81,900 in March, from 79,800 in December.
“Hiring looked restrained, as seen from MOM’s Q1 2024 employment change figures,” said DBS economist Chua Han Teng. “But we expect sequential improvements in Singapore’s economic growth, driven by external-led sectors, to support employment growth in the second half of 2024.”
MOM also expects continued improvements in employment due to an improved economic outlook for 2024, sustained increase in the number of job vacancies and increased hiring optimism over the next quarter.
“We do not expect increases in unemployment rates to be sustained as the number of retrenchments continued to ease, and resident employment growth had been positive in the first quarter of 2024,” it said.
But with resident workforce growth slowing and low resident unemployment rates, “continued growth in resident employment is likely to become more muted”, said MOM.
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Employment change
The fall in the re-entry rate was driven by the information and communications, financial and insurance services, as well as professional services sectors.
Still, more than half of the residents retrenched in these sectors were able to find new jobs within six months after being laid off, said MOM.
By age group, the decline in re-entry rate was more pronounced among those in the prime working ages between 30 and 39. The rate for this group fell to 67.5 per cent in the first quarter – the lowest since 2018 – from 75.2 per cent in the fourth quarter of 2023.
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“However, based on the experiences of previous cohorts of retrenched workers, their re-entry rate will improve significantly over time,” said MOM.
As for job vacancies, openings in growth sectors made up nearly one-third of the total. These sectors, normally associated with higher productivity and pay, include health and social services, information and communications, professional services, as well as financial and insurance services.
The ratio of job openings to unemployed persons fell to 1.56 in March, from 1.74 in December. Though the ratio has fallen from the high of 2.54 recorded in June 2022, it is still an indication that the labour market remains tight, said MOM.
Yet, a less tight labour market and moderate intentions by employers to raise wages would contain business cost pass-through to consumer prices, and allow core inflation to continue easing over the course of 2024, said Chua.
The recruitment rate dipped slightly to 2.1 per cent in Q1, from 2.3 per cent in the previous quarter. Meanwhile, the resignation rate held steady at 1.4 per cent.
The ministry noted that the recruitment rate has returned to pre-pandemic levels, while the resignation rate has “largely stabilised or declined across sectors and occupational groups”.
Retrenchments fell in the first quarter to 3,030, from 3,460 the previous quarter, due to declines in the number of retrenchments from outward-oriented sectors such as wholesale trade and electronics manufacturing.
The incidence of retrenchment also continued to fall in Q1, to 1.3 per 1,000 employees. This is lower than pre-pandemic levels, where the quarterly average for the period between 2015 and 2019 was 1.7 per 1,000 employees.
More firms cited business re-organisation or restructuring as the reason for retrenchment, up to 72 per cent in the first quarter from 59 per cent the previous quarter.
Resident employment up, non-resident down
Total employment, excluding migrant domestic workers, grew by 4,700 in the first quarter, driven by an increase in resident employment.
The increase in resident employment was driven by financial and insurance services, as well as the public administration sector.
In contrast, non-resident employment fell by 800 in Q1 – the first time since the first quarter of 2021, where it fell by 21,500. The decline was mainly in construction and manufacturing as the lower dependency ratio ceiling for the construction and process sectors came into effect, said MOM.
S Pass holders also experienced negative growth in Q1, following the increase in qualifying salaries and levies in 2023. Meanwhile, the number of Work Pass holders grew, though at a much slower pace than the previous quarter, said the ministry.
Employment Pass (EP) holders registered their first decline since late 2021. The declines were recorded in sectors such as information and communications, as well as professional services, which continue to face global headwinds.
But the number of EP holders grew in other sectors, such as wholesale trade and transportation, as well as storage. “Overall, EP applications have picked up in tandem with the improving economic outlook”, said MOM.
Unemployment rates inched up in March compared to previous months, “but remained within the range observed during non-recessionary periods”, said MOM. The unemployment rate was at 2.1 per cent overall, 3 per cent for residents and 3.1 per cent for citizens.
Meanwhile, the resident long-term unemployment rate remained low at 0.8 per cent in March.
“Given the sustained increase in job vacancies and the increased hiring optimism among firms for the next quarter, I am optimistic that Singapore’s labour market will continue to expand, that that unemployment will remain low,” said Minister for Manpower Tan See Leng in a Facebook post.
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