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Number of unionised jobs lost soars 76%

More retrenchments this year may hit high value-added chemical industry

[SINGAPORE] The number of workers who lost their jobs in the unionised sector last year spiked sharply to 2,898, a 76 per cent jump from the 1,647 laid off in 2012.

While it was not surprising that the manufacturing sector accounted for nine in 10 of those retrenched, the chemical industry - a high value-added sector in Singapore's economy - has been singled out as one that could see more retrenchments this year.

Major players in this sector such as Japanese specialty chemicals maker Ishihara Sangyo Kaisha (ISK) shut their Singapore operations recently, culling around 200 jobs in the process, setting off "some alarm" in the labour movement.

"They are not in the low-end business. They say that their problem is not that the workers don't have the skills. The companies feel that operating in Singapore just costs too much," said National Trades Union Congress (NTUC) assistant secretary-general Cham Hui Fong yesterday.

ISK, for instance, cited the strong Singapore dollar and rising operating costs as some of the reasons for its pullout.

OCBC economist Selena Ling said that it was clear that manufacturers here are facing a challenging time, be it in terms of soft external demand, higher business costs or manpower constraints.

"The longer the latter two persist, it may slowly chip away at Singapore's perceived competitive edge. That said, services rather than manufacturing is the key jobs driver for the Singapore economy," she told The Business Times.

Labour economist Randolph Tan, an associate professor at SIM University, felt that it was important to do what it takes to retain the multinational companies rather than lose them to competitors.

"We have benefited from the MNCs over the years, more so than the other East Asian countries. The MNCs are key to helping us in the next phase of our economic restructuring," he said.

According to NTUC, last year's layoffs were mainly the result of the relocation of operations out of Singapore, or a shutdown of production facilities here.

Four in 10 workers lost their jobs as their companies restructured and shifted production to lower-cost destinations such as Malaysia, China and Vietnam.

Production and manual workers, as well as technicians, made up two-thirds of all displaced workers in the unionised sector. The share of professionals, managers and executives accounted for a quarter of the retrenched workforce in the past three years.

NTUC is aware of at least 200 workers who could be retrenched in the first quarter of 2014 alone, mostly from the electronics sector.

Ms Cham called on employers who are affected by the business downturn to take a long-term view of their manpower needs.

"Instead of retrenchment, companies should, in consultation with the unions, consider other cost-cutting alternatives to better manage excess manpower," she said.

But there is some good news for those laid off in the current climate. Ms Cham revealed that there are at least two job openings for every displaced worker today, though the main challenge is ensuring that they have the right skills and are properly matched with jobs.

As far as wage increases are concerned, she said that workers can expect to see their salaries go up by about 4-5 per cent this year because of the continued tight labour market and as companies try their best to retain talent.

The average basic wage increase for those in unionised firms last year was 4.25 per cent, comparable to the figure in 2012.

Slower growth and weakened global demand affected business turnover and profitability, leading to lower wage increases in the manufacturing sector, especially in the electronics, chemical and light manufacturing industries.

The services sector fared slightly better with an average increase of 4.43 per cent, a shade better than manufacturing's 4.15 per cent.

In terms of bonuses, unionised companies gave out better payouts of an average of 3.63 months last year, up from 3.27 months in 2012.

"We want to continue to see how to grow the wage increase. At the same time, the message to companies is that they must expect the unions to come to them and ask for good wage increases. For them to make this sustainable, it is their responsibility to (improve their) productivity," said Ms Cham.