MOM plans to increase worker support ahead of job market shifts: Jasmin Lau

Lau said: “I don’t expect that we will go back to a period of long stability (where) companies are there for ages, workers can go into companies and stay for 30 to 40 years.”

She added that the sectors with growth opportunities – financial services, infocom, advanced manufacturing – are also where quite a lot of churn is expected to happen as these companies are competing internationally.

Lau said global events such as changing tariffs and conflict in the Middle East are behind most of the business restructuring that has resulted in retrenchments.

The use of artificial intelligence in businesses has not reached a stage where it’s displacing the workers yet, added Lau, who is also Senior Minister of State for Digital Development and Information.

But she said AI has had some impact on firms’ willingness to hire, with some trying out the technology and hiring at a slower pace as they do so.

Getting back to work

Beyond retrenchments, the other figure to watch is the rate that workers are getting into new roles, and how quickly, Lau said.

“If retrenchments come with longer and longer periods outside of jobs – that’s more worrying.”

Workers are getting new jobs at lower rates, comparing statistics from today and a decade ago.

Then, 64.6% had a new job in six months and 77.9% at the one-year mark. Now, 54.9% had new jobs at the six-month mark, and 69.8% at a year.

Some of this is driven by PMETs in specialised roles or industries having difficulty with switching to a similar role, she said, adding that workers may have to transition to a new industry going forward.

She cited a software engineer in a technology company switching to the healthcare sector, and having to grasp a completely different domain and systems.

Most employers who take workers from a different sector now want retraining to be done first, she added.

The Government’s schemes must be shaped to handle career transitions, including cushioning workers who need time to move into a different industry or role, said Lau, who sketched out her plans without giving exact details.

MOM is looking at expanding support for these workers and removing barriers such as age limits on schemes.

“If we are trying to support PMETs who are in middle income bands, then (the) amount of support we give them would have to be improved.”

For fresh graduates, the concerns are not just about getting their feet in the door but also about gaining skills for the “second and third rung” of work, Lau said.

MOM is drawing lessons from the Graduate Industry Traineeships (GRIT) programme, she said, to design longer, more structured training with elements of apprenticeships, such as close mentorship, industry-recognised certification and a job at the end.

Employment Act review

The ministry also intends to “take a good look” at whether retrenchment benefits can be made mandatory, but could stop short of writing them into law, Lau said.

It is doing so under the ongoing tripartite Employment Act review that will put out its recommendations by early next year.

The recommendations could see MOM use levers such as access to foreign workers and government grants against companies that do not pay retrenchment benefits despite being able to.

MOM is also looking to expand protections for PMETs under the review, as the law has traditionally catered more to blue-collar workers, said Lau. This could involve changes to rules governing medical leave, among others.

She said the review also aims to keep rules clear so they do not overly restrict how employers manage their workforces.

The main concern about legislating protections like retrenchment benefits is that the outcomes may not necessarily work for either workers or businesses, Lau said.

Doing so could encourage “litigation as a first instinct”, she said, where workers end up entering cycles of litigation with companies which cost fees on both sides and do not guarantee any benefit at the end if firms cannot pay.

“Once you put things into law, that will be the natural course of action. I think we want to see what you can do before always looking at the law instinctively as the lever,” she added, noting that most companies already pay retrenchment benefits.

Lau said the review is meant to give local workers more security over employment and to push for progressive workplace practices.

The ministry is also working to ensure the laws are clear and not too restrictive for employers, she said, citing situations in other countries where overly restrictive laws have caused firms to move from offering permanent jobs to contract roles.

“If your rules end up too strict, or you’re forcing companies to give benefits that are way beyond what they can afford given their growth trajectory, then you end up actually in a situation where the companies respond in a not great way, and then your workers still suffer at the end of the day.”

Catering to both workers and companies is central to the role of the Manpower Ministry – whose job Lau described as the steward of a healthy labour market.

“We have to cater to the workers because jobs are about livelihoods, about hope, optimism, whether they can keep their families going, whether they feel confidence in the future.

“While we can say at the end of the day, it’s about the jobs and the workers, if there are no companies who want to invest here and the companies cannot grow, then it’s very hard to provide for the Singaporeans that we serve.”