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Speech at Launch of "Thriving Enterprises, Vital Workforce - ASME's Approach to Effective Employment"

Mr Gan Kim Yong, Minister of State for Education and Manpower, Surbana One, i-Connect

Mr Lawrence Leow, President of Association of Small and Medium Enterprises (ASME)

Distinguished Guests

Ladies and Gentlemen

1.   Good morning. I am delighted to join you today at the launch of  "Thriving Enterprises, Vital Workforce - ASME's Approach to Effective Employment".

Ageing Population & Longer Life Expectancy

2.   There has been much public discussion in recent months about the ageing population in Singapore. Let us recap some of the numbers. Half of all Singaporeans who are aged 62 and above in 2006 will live past the age of 85. Today, 8 working adults1 support one resident above age 64. This number will be halved to 4 working adults by 2030. And according to projections from the United Nations, by 2050, we will be the 4th oldest population in the world2.

3.   What this means is that Singaporeans will live longer and we will need to work longer, so that we lead healthy and productive lives and  have enough savings for retirement. For employers, it also means that there will be fewer young people entering the workforce each year in the future. For continued business growth, employers need to be prepared for the challenges of an ageing workforce. In particular, SMEs will face increasing competition for manpower, which is why the ASME is launching this programme to prepare SMEs for effective employment. Companies that are willing to hire mature workers and implement HR policies or re-design work arrangements to attract and retain their older workers, will have a clear edge over their competitors.

4.   Today, I would like to touch on two key strategies for companies to cope with increasing manpower demands – re-employment of older workers, and attracting new workers through part-time and flexible work arrangements.

Re-Employment of Older Workers

5.   The re-employment legislation will be implemented by 1 January 2012. By then, employers will be required to offer re-employment to their employees when they reach the statutory retirement age of 62, first up to the age 65, and later on, to 67. Between now and 2012, the tripartite partners are actively engaging companies to encourage and help them put in place re-employment policies early. Companies should tap on the WDA's ADVANTAGE! Scheme, which provides funding of up to $400,000 per company for recruiting, retaining and re-employing older workers. We are also working on a set of tripartite guidelines for employment of workers beyond the statutory retirement age.

6.   Re-employment is intended to help both workers and businesses. Instead of raising the statutory retirement age, we have opted for re-employment because it offers flexibility and sustainability. Flexibility because it allows both the employer and employee to work out a re-employment offer agreeable to both parties, taking into account the companies' requirements and the needs of the older worker; and sustainability in terms of allowing wages and benefits to be adjusted to reflect the value of the job so that companies can remain competitive.

ASME – Helping SMEs to be effective employers

7.    I am glad that ASME has been proactive in providing support to the SMEs. This is important as the majority of SMEs3 employ older workers.

8.   In June this year, the Enterprise Development Centre or EDC@ASME started to administer the ADVANTAGE! Scheme. Just two months ago, a targeted ADVANTAGE! for SMEs was introduced. Riding on the momentum of the positive employment growth, ASME is now launching this "Approach to Effective Employment". Such timely initiatives on the part of the SMEs is commendable.

9.   ASME's approach provides a comprehensive roadmap to guide SMEs. There are three components to the roadmap. First, there is an online booklet which provides SMEs with a one-stop information shop on current employment-related legislation. Next, they have a PREPARE programme, which covers six areas of HR such as performance-based reward systems, job design, workplace health and re-employment practices. Employers will be equipped with practical tools to implement age-friendly processes and monitor the progress so that early interventions may be taken, if needed. And finally, to facilitate learning from real-life examples, the LEARN network is being developed to enable companies to share and learn from one another, and helps SMEs to apply the tools in their own companies. I commend ASME for taking this initiative.

Flexi-Works! – Attracting new workers back to the workforce

10.   Preliminary estimates4 show that total employment gains for the first three quarters of 2007 are 171,500, and the seasonally adjusted overall unemployment rate has fallen to 1.7%, the lowest in a decade.

11.   As the labour market continues to tighten, businesses will need new sources of manpower to support their growth. We should tap on the economically inactive population as a viable source of manpower. The majority of these are women and older people5, many of whom prefer to return to work on part-time or flexible work arrangements.

12.   To help companies tap on this viable source of manpower, I am pleased to announce that MOM and WDA are launching a $3 million "Flexi-Works!" Programme. The one-year programme will provide companies with up to $100,000 assistance per company, to recruit unemployed persons on flexible work arrangements or in part-time jobs. The programme will be jointly administered by WDA and NTUC. More details will be announced later.


13.   We will continue to help employers develop strategies to meet their manpower needs as we face the challenges of an ageing workforce and a growing demand for manpower. I am optimistic that we will be able to do so with the help and support of partners such as ASME, which has put in place this comprehensive approach to help SMEs become effective employers. On this note, I would like to thank ASME for their continued support and to congratulate them on the successful launch of the "ASME's Approach to Effective Employment".

14.   Thank you.

1Aged 15 to 64.

2 Study by the UN Population Division. The median age of Singapore's population is projected to be 54 years by 2050, behind Macau (56), Japan (55) and Korea (55).

3 86.5% of companies with 25-99 workers and 95.7% of companies with 100-249 workers employed older workers aged 50 to 59. 48.5% of companies with 25-99 workers and 64.7% of companies with 100-249 workers employed older workers aged 60 and above. Firms' Adoption of Age-Positive Human Resource Practices, MOM, May 2007.

4 Source: Employment Situation, Third Quarter 2007, MRSD.

5 The economically inactive includes 260,500 women aged 25 to 54 and 430,600 people aged 55 and above. Labour Force Survey, MOM 2006.