Statement on Labour Market Developments in 2021
1. The labour market showed broad recovery in 2021. Resident employment grew strongly, and unemployment rates continued to improve, nearing pre-COVID levels. Retrenchments also declined significantly, and a higher proportion of retrenched residents were able to secure employment. With economic growth gaining momentum, hiring and job vacancies have gone up. Some sectors continue to face labour shortages, in part due to border restrictions that have constrained the inflow of foreign labour since the onset of the pandemic. However, with the gradual easing of these restrictions, non-resident employment registered an increase in the fourth quarter of 2021 (4Q 2021), for the first time in two years. Consequently, total employment expanded by 47,900 in 4Q 2021.
2. The labour market recovery is expected to continue in 2022. However, downside risks in the global economic outlook have increased, which could weigh on the pace of recovery. Domestically, the outlook is also uneven across sectors. While the resident long-term unemployment rate has eased, it continues to be elevated compared to pre-COVID levels. On its part, the Government and tripartite partners will continue to support jobseekers to reskill and transit into new jobs.
REVIEW OF THE LABOUR MARKET IN 20211
3. Total employment (excluding Migrant Domestic Workers) rebounded in 2021 (+41,400), after a sharp contraction in 2020 (-166,600). This rebound was attributed to faster growth in resident employment (+71,300) which more than offset the decline in non-resident employment (-30,0002).
4. The increase in resident employment was broad-based. Gains were larger in Information & Communications, Health & Social Services, Professional Services, Administrative & Support Services, and Financial Services. On the other hand, resident employment fell moderately in Accommodation, Air Transport & Supporting Services, and Arts, Entertainment & Recreation, reflecting the effects of tight travel restrictions for the most part of the year.
5. Among non-residents, the decline was mainly driven by EP (-15,300) and S Pass (-12,200) holders, whilst WP+ fell by a smaller extent (-2,400).3 By industry, non-resident employment declined in all sectors, except for Construction, which was boosted by the increase in the final quarter of the year as border restrictions progressively eased.
6. The annual average4 unemployment rates in 2021 were significantly lower than in 2020 (overall: from 3.0% to 2.7%, resident: from 4.1% to 3.5%, citizen: from 4.2% to 3.7%), as the unemployment situation improved steadily throughout the year. In January 2022, unemployment rates declined to around December 2019 levels.5
7. As structural mismatches tend to take longer to dissipate, the annual average resident long-term unemployment rate in 2021 (1.0%) was unchanged over the year and remained elevated compared to 2018-2019 (0.7%).
8. Notwithstanding this, business slack has ameliorated significantly. Retrenchments fell from a high of 26,110 in 2020 to 8,020 in 2021, below levels seen in pre-COVID years.6 With the pick-up in business activities, fewer employees were placed on short work-week or temporary layoff by 4Q 2021 (1,200), though the number remains above pre-pandemic levels.7
9. In addition, the annual re-entry rate among retrenched residents rose from 62% in 2020 to 66% in 2021 - a six-year high. There was also broad-based improvements across age, education and occupation groups.
10. With more job opportunities, the seasonally adjusted recruitment rate trended higher to 2.5% in 4Q 2021 - a rate last seen in 2014. The seasonally adjusted resignation rate held steady over the quarter at 1.7%, slightly below the typical pre-COVID rate.8
11. Overall, the labour market remained tight, with the number of job vacancies (seasonally adjusted) rising further to 117,100 in December 2021. The ratio of job vacancies to unemployed persons also rose to 2.11 in December 2021 from 1.95 in September (seasonally adjusted). The high number of job openings was driven in part by travel restrictions impacting the inflow of migrant workers. However, with the gradual easing of these restrictions, we expect non-resident workforce numbers to improve in 2022, and job vacancies in sectors with heavier reliance on migrant workers to abate. In growth sectors such as Information & Communications, Financial Services, and Professional Services, which continue to see robust resident employment growth, job vacancies also increased and remained high.
LABOUR MARKET OUTLOOK
12. In February, the Ministry of Trade and Industry (MTI) maintained Singapore’s GDP growth forecast for 2022 at “3.0% to 5.0%”. Since then, downside risks in the global economic outlook have increased amidst the Russia-Ukraine conflict. Barring these uncertainties, the labour market recovery should be sustained in 2022 as business activities continue to pick up. Nonetheless, the pace of recovery may be more gradual since most significant improvements were already experienced in 2021.
13. Domestically, the outlook for the various sectors continues to be uneven. Barring a sharp slowdown in the global economy, growth in the outward-oriented sectors is expected to remain positive. In particular, growth is expected to remain healthy in Information & Communications and Financial & Insurance Services, due to robust demand for IT and digital solutions, and credit and payment processing services respectively. This should provide sustained labour demand in these sectors. At the same time, consumer-facing sectors (e.g. Food & Beverage Services and Retail Trade) are projected to benefit from the gradual easing of COVID-19 measures in Singapore. More workers will be needed to support this pick up in business activities. On the other hand, the recovery of the tourism and aviation-related sectors is expected to be slow on the account of the gradual loosening of travel restrictions globally, and the nascent recovery in global travel demand. Employment levels in these sectors may take longer to return to pre-COVID levels.
14. The labour market has made significant recovery in 2021. The gradual easing of COVID-related measures will provide an uplift to the most affected sectors, as well as allow the non-resident workforce to recover and ease some of the labour market tightness. At the same time, the Government and tripartite partners will continue to support our workers and businesses to seize new opportunities with the recovery, and be prepared for future jobs and skills. As announced at Budget 2022, we have extended the SGUnited Jobs and Skills Package and the Jobs Growth Incentive.
a. The Jobs Growth Incentive will be extended to September 2022 for eligible employers who hire mature workers aged 40 and above who have been out of work for at least six months, persons with disabilities, and ex-offenders. Eligible employers of such local hires will receive up to $21,600 per hire over a 12-month period – 40% salary support for the first $6,000 of gross monthly wages for the first six months, and 20% of the first $6,000 for the next six months.
b. The SGUnited Mid-Career Pathways Programme will be retained as a permanent addition to our suite of career matching programmes. Mature trainees can receive up to $3,800 in training allowance, which the Government will co-fund 70% and the host organisation funding the remaining 30%. This will provide another option for mature jobseekers looking to switch careers, in addition to the over 100 Career Conversion Programmes available across about 30 sectors.
15. Local jobseekers who need assistance can approach Workforce Singapore or NTUC’s Employment and Employability Institute, including through the SGUnited Jobs and Skills Centres that we have made permanent in all 24 HDB towns. Mature jobseekers, the long-term unemployed, and persons with disabilities, can also approach our SGUnited Jobs and Skills Placement Partners – Adecco Personnel Pte Ltd, Charterhouse Pte Ltd, and Good Job Creations (Singapore) Pte Ltd.
FOR MORE INFORMATION
16. The “Labour Market Report 2021” is released by the Manpower Research and Statistics Department, Ministry of Manpower. The report and technical notes on the various indicators are available at http://stats.mom.gov.sg/Pages/Home.aspx.