Speech at Press Conference on Business Financing and Manpower Upgrading

Mr Gan Kim Yong, Acting Minister for Manpower

Our workforce is in a stronger position to meet the challenges of the downturn

1.   We have transitioned sharply from a period of record employment growth and low unemployment, to one of greater uncertainty and likely higher unemployment.

2.   However, we are in a stronger position to weather this downturn than in the previous 2 recessions. 

a. First, our resident labour force is better educated than before. In 1997, 22% of our local workers had a post secondary education. This has increased to 36% in 2007. Our workers are now better equipped with skills that will stand them in good stead.

b. Second, we have built up a high-quality national CET infrastructure over the last few years. There are now 42 CET Centres which offer a whole range of courses in manufacturing, services and construction, catering to workers of all levels.

c. Third, and this is an enduring strength of Singapore, we have built a strong tripartite relationship. The tripartite partners have also developed capability over the past few years to help our workforce and companies. NTUC has established the e2i and other programmes such as Job Redesign. The tripartite partners will work together to help both employers and workers through this downturn.

3.   Over the past few weeks, some companies have announced that they are restructuring or scaling back their hiring efforts. This is not unexpected. But there are still sectors that are or will be hiring, for example the integrated resorts, petrochemicals, transport engineering, biomedical sciences, healthcare and education.

4.   To navigate through the downturn and emerge stronger and more competitive when the economy eventually recovers, employers, workers and government must all work together.

Managing Excess Manpower in a Responsible Way

5.   The tripartite partners – MOM, NTUC and SNEF, are leading the way. Just two days ago, we released the Tripartite Guidelines for Managing Excess Manpower. The Guidelines spell out various alternatives for employers to better manage their excess manpower instead of retrenchment, such as training their workers, redeploying workers to alternative areas of work within the organisation, implementing shorter work-week, temporary lay-off, or flexible work arrangements, and managing wage costs through flexible wage systems. These measures will help businesses reduce costs while at the same time save jobs.

SPUR - More High-Quality CET Places

6.   Today, we are announcing the details of SPUR, the Skills Programme for Upgrading and Resilience. This will be a 2-year programme costing the Government $600 million.

7.   The first key thrust of SPUR is to accelerate the ramp up of the training capacity in our CET Centres, from 110,000 places in FY08 to 220,000 places in FY09. These CET Centres include our polytechnics, ITE and best-in-class private providers. They are part of an extensive system of CET Centres covering many sectors where workers can walk in and sign up for subsidised training. Over the next year, we will increase further the number of such CET Centres to give our employers and workers an even wider range of training opportunities.

SPUR – Structured and customised training pathways

8.   With the development of our CET system in recent years, we now have structured and customised skills upgrading pathways that will enable workers, both employed and unemployed, to acquire new sets of skills relevant to their own needs and the needs of the industry. This is the second key thrust of SPUR – clear training pathways for higher skills and career progression for our workers. This means the training under SPUR will be more purposefuI and clearly directed. I strongly encourage workers to approach the Career Centres at the CDCs or e2i, or the CET Centres directly, for advice on training pathways to upgrade their skills.

SPUR – Enhanced funding support for employers and workers

9.   SPUR will provide enhanced financial support for course fees and absentee payroll for local workers. Not only can SPUR help employers reduce manpower costs and save jobs, it will also help to upskill our labour force and strengthen our capabilities to prepare for the economic upturn. 

10.   We are increasing course fee subsidy to 90% for Rank & File and 80% for PMET-level courses. We are also increasing the cap for absentee payroll rate by 50%. We will provide training allowances for unemployed, low-skilled workers who are assessed by the career centres (at CDCs and e2i) to require training support, as well as an allowance for PMETs who are undergoing longer professional conversion programmes in areas where we want to build up a critical base of skills.

Strengthening the linkage between training and job placement

11.   We know that workers may be concerned about whether training will lead to job placements. I would like to reassure Singaporeans that the career consultants at the Career Centres and e2i will provide advice on training with a view on where the career opportunities are, based on our best assessment of the employment situation. We will also continue to strengthen our job matching services.

Manage the downturn and stay on course for the longer-term

12.   As we brace ourselves for more difficult times ahead, not only must we be flexible to manage the downturn, we should also not lose sight of the longer-term imperatives. Companies should think not only of cutting costs in the short-term, but also how to retain their best workers whom they will find harder to recruit when the economy recovers. Companies should sharpen their long term business competitiveness by upgrading their workers' skills and investing in productivity improvements, so that they are better positioned when economic growth returns.

13.   For workers, I encourage you to be flexible and open to adjustments in work arrangements and wages, and be realistic in your expectations.  Make full use of the opportunities available to upgrade your skills or consider retraining for jobs in another sector.

14.   We have the funding and the infrastructure in place for SPUR to help businesses and workers. What is critical to the success of SPUR now is for employers and workers to pull together and navigate through the difficult times together. Over the next few months, the tripartite partners will be actively reaching out to employers and workers, so that they can understand how SPUR can support and benefit them, and encourage them to tap on the training under SPUR.

15.   We are fortunate to have our tripartite leaders here with us today, and together, I am confident we can help our employers and workers not only manage this downturn, but also upgrade the skills of our workers so that we emerge stronger as a workforce, more competitive as companies and more resilient as a country.