Speech at Singapore Tripartism Forum (STF) Dialogue on Managing Manpower Challenges in the Economic Downturn
Mr Gan Kim Yong, Acting Minister for Manpower, NTUC Auditorium, One Marina Boulevard
Mr. Lim Swee Say,
Secretary General, NTUC, and Minister, Prime Minister's Office
Mr. John De Payva, President, NTUC
Mr. Stephen Lee, President, SNEF
Distinguished Guests,
Ladies and Gentlemen.
Introduction
1. Good afternoon and welcome to the Singapore Tripartism Forum (STF) dialogue on "Managing Manpower Challenges in the Economic Downturn".
Overall Economic and Labour Market Outlook
2. We are facing trying times ahead. We have transitioned sharply from a period of record employment growth and low unemployment, to one of greater uncertainty and likely higher unemployment. The external economic environment has deteriorated significantly in recent months. Being a small and open economy, Singapore is fully exposed to the headwinds of the global economic storm. Our GDP growth forecast for 2008 has been adjusted downwards from around 3% to around 2.5%. Next year, MTI has forecasted Singapore's GDP growth to be between minus 1% and 2%. How and when our economy recovers, will very much depend on the global economy, especially the performance of major world economies, and how we deal with the challenges of the downturn.
3. Given the weak economic outlook, our labour market is likely to come under pressure in the coming quarters. Already, in the third quarter of this year, we have begun to see a slowdown in job creation and an increase in the number of retrenchments. Many companies have already frozen recruitment and some are restructuring their operations. This is not unexpected as businesses have to respond to the downturn. Fortunately we are coming from a position of strength after several years of good economic growth, with the resident employment rate having risen from 76.5% in June 2007 to a new high of 77% in June 2008. Improvements were also seen in the employment rate of women and older persons.
A Speedy, Substantial and Sustained Government Response
4. With the unprecedented nature of the global economic downturn, both in terms of its scale and the speed with which it unfolded, as well as the possibility of a protracted downturn, we need to respond swiftly and decisively.
5. Ahead of Budget 2009, the Government has already announced several measures targeted at specific areas that require immediate action. MAS and MND had separately announced measures to help the financial and property markets. MTI has introduced business financing measures to help those affected by the credit crunch. MOM, together with our tripartite partners, has rolled out the tripartite guidelines on managing excess manpower and the Skills Programme for Upgrading and Resilience (SPUR) to help employers and workers manage costs, upgrade skills and build capabilities during this downturn.
6. The Government has also brought forward Budget 2009 so that we can introduce more measures to help our businesses and households earlier.
Tripartite Partnership Critical in Managing Downturn
7. However, the Government's response is only one part of the equation that will help to see Singapore through these difficult times. More importantly, how Singapore and Singaporeans can cope with the downturn and whether we can emerge stronger after this will depend on the strength of our tripartite partnership, and what each employer and worker does.
8. The tripartite partners – MOM, NTUC and SNEF – have been working closely together to help businesses and workers manage the downturn. Following the recent announcement of the revised Tripartite Guidelines for Managing Excess Manpower and SPUR, tripartite partners have received much interest from employers who wanted to know more about how they could implement the guidelines and how they could tap on SPUR. For example, one company from the finance industry has confided to us that they are following the Tripartite Guidelines on Managing Excess Manpower closely. If needed, the company may cut the Monthly Variable Component which has already been put in place in the salary structure. They have also committed that the senior management will take the lead in wage cuts if necessary. Their approach in dealing with excess manpower is in line with the objectives of the tripartite guidelines in achieving a win-win outcome and is indeed commendable.
9. I am also glad to note with the higher funding under SPUR that there are many employers who are taking the opportunity, to upgrade the skills of their workers. Just to name two - Chan Brothers plans to send some 50 of its 200 employees (25% of the workforce) for courses in tourism and travel services. Another employer, Lian Ying Industries intends to send its workers for the Precision Engineering WSQ Specialist Diploma in mid-2009.
10. As we brace ourselves for more difficult times ahead, not only must we be flexible in managing 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. Besides helping employers and workers manage the economic downturn, another key thrust of SPUR is to build up the skills base of our local workforce in key industries so that we can anchor these industries here and grow them when the economy recovers. This has been made difficult in recent years because of the tight labour market. We want to leverage on the opportunities afforded by the current downturn to build up a core pool of skilled local workers that would strengthen the industry for the upturn.
Conclusion
11. The months ahead will not be easy. These difficult times will be a test of our national resilience. We are fortunate to have a strong tripartite relationship between the unions, employers and the Government and this is a key competitive advantage for Singapore. Because of the mutual trust and co-operation, the tripartite partners have been able to work together to reach consensus on major issues facing Singapore, cope with challenges, and overcome difficulties. With this strong tripartite partnership that has been forged over the decades, I am confident that we can all work together to navigate through the downturn and we will emerge stronger and more resilient when the global economy recovers.
12. Thank you.