Statement on Labour Market Developments in 2022
INTRODUCTION
1. The labour market improved significantly in 2022 compared to 2021.Total employment grew by an unprecedented 227,8001, reaching 2.9% above its pre-pandemic level. Resident employment continued to grow, particularly in outward-oriented sectors such as Financial Services, Information & Communications and Professional Services. Resident unemployment and long-term unemployment rates in December 2022 remained low. The number of retrenchments in 4Q 2022 (2,990) doubled from 3Q 2022 (1,300), driven by business restructuring. Total retrenchments in 2022 (6,440) remained low compared to pre-pandemic years, despite increasing in the last two quarters of 2022. The percentage of retrenched residents who found employment increased to 73.1% in 4Q 2022, the highest since 2Q 2015.
2. Job vacancies have fallen in the last three consecutive quarters but remained elevated. Hiring sentiments remain positive, although global headwinds may weigh on labour demand. The government and tripartite partners will continue to support employers and workers to be resilient, and ready to seize the opportunities ahead.
REVIEW OF THE LABOUR MARKET IN 20222
3. Total employment registered a record-high increase of 227,800 in 2022, bringing total employment to 2.9% above the pre-pandemic 2019 level.
4. Resident employment continued its steady growth, increasing by 26,300 in 2022. The increase was mostly in outward-oriented sectors such as Financial Services and Information & Communications. By December 2022, the resident employment level has surpassed 2019’s level by 4.8%.
5. Non-resident employment contributed to the bulk of the increase in total employment (201,600), although it has yet to reach its pre-pandemic level (99.2% compared to 2019). This increase was primarily due to the hiring of Work Permit Holders (WP+) in sectors such as Construction and Manufacturing3 as employers backfilled positions following the significant relaxation of border controls in April 2022.
6. Annual average4 unemployment rates improved further in 2022 compared to 2021 (overall: from 2.7% to 2.1%, resident: from 3.5% to 2.9%, citizen: from 3.7% to 3.0%) and are below pre-pandemic levels5. The resident long-term unemployment rate improved to 0.6%, below the pre-pandemic average of 0.7%.
7. Despite increasing in the last two quarters of 2022, the total number of retrenchments for 2022 (6,440) was lower than pre-pandemic levels6.The top reason for retrenchment was business reorganisation/restructuring. The percentage of retrenched residents who found employment (six months post-retrenchment) increased to 73.1% in 4Q 2022, the highest since 2Q 2015 (73.6%).
8. The number of job vacancies (104,500) continued to decline for the third consecutive quarter in December 2022 but remained elevated. With the number of unemployed persons also declining, the ratio of job vacancies to unemployed persons increased to 2.33 in December 2022. A significant proportion of vacancies were in sectors such as Construction and Manufacturing, which were sectors typically more reliant on foreign workers.
LABOUR MARKET OUTLOOK
9. In February 2023, MTI maintained the GDP growth forecast range for 2023 at 0.5% to 2.5%, which is below the 3.6% recorded last year. Uncertainties in the global economy persist, including the impact of tighter financial conditions across many advanced economies on global growth, as well as the risk of further escalations in the war in Ukraine and geopolitical tensions among major global powers. Domestically, aviation and tourism-related sectors, such as Air Transport and Accommodation, are expected to continue to benefit from the recovery in air travel and inbound tourism, which will be boosted by the relaxation of China’s border restrictions. On the other hand, the growth outlook for outward-oriented sectors like Manufacturing remains weak given the broader slowdown in the global economy.
10. Global economic headwinds and slower growth may weigh on labour demand going forward, although hiring sentiments in December 2022 remain positive. Employment growth is likely to ease from 2022’s increase and be uneven across sectors.
CONCLUSION
11. To remain competitive and resilient amidst economic uncertainty, the government encourages employers and workers to make full use of government programmes to accelerate the pace of transformation and upskill their workforce.
- Employers can refer to the Jobs Transformation Maps (JTMs) to understand how their businesses and job demands may change in response to sectoral trends. A total of 10 JTMs are available on Workforce Singapore's (WSG’s) website7, and eight more will be progressively completed. The JTMs identify the key technologies that are driving change, and their impact on individual job roles. With this information, employers and workers can pre-emptively redesign jobs and acquire the necessary skills for jobs of the future.
- Employers can tap on the Support for Job Redesign under Productivity Solutions Grant, to make their jobs more productive and attractive to jobseekers. In addition, WSG offers Career Conversion Programmes to support employers in re-skilling their existing employees to take on enhanced job roles, and training mid-career workers to take on new roles.
- Per the National Wages Council’s 2022/2023 guidelines, employers should adopt the Flexible Wage System so that they are in a better position to deal with any headwinds, even as they reward employees with wage increases or variable payments in line with their firms’ recovery and performance over the past year.
FOR MORE INFORMATION
12. The “Labour Market Report 4Q 2022” 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.