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Speech at the STF Re-Employment Seminar

Mr Gan Kim Yong, Minister for Manpower, Grand Copthorne Waterfront Hotel

Employment practices
Mr John De Payva, President, NTUC

Mr Lawrence Leow, President, ASME & Deputy Honorary Secretary, SBF Council

Mr Heng Chee How, Deputy Secretary-General, NTUC

Mr Alexander Melchers, Vice President, SNEF

Distinguished Guests,

Ladies and Gentlemen,

A very good morning to all of you.

  1. Many of you may have heard the saying "60 is the new 40". Singaporeans are living longer and feeling younger. Today, many Singaporeans are still going strong and making meaningful contributions to their diverse occupations even at the age of 60 and beyond.

    RE-EMPLOYMENT GIVES COMPANIES A COMPETITIVE ADVANTAGE
  2. Businesses are also realising that retaining and re-employing their older workers gives them a competitive edge. It enables them to harness the experience and skills of an older workforce. Take Nestle Singapore. Nestle has re-employed their Trade Relations Coordinator, Mr Joseph Tan when he turned 62 eight years ago. He is now 70 and continues to make significant contributions to the company.
  3. Today's tight labour market makes retaining and re-employing older workers even more critical for employers. To remain competitive and moderate the need for foreign manpower, employers should tap on the pool of mature workers to supplement their workforce. The numbers show that many are indeed doing so. The employment rate of workers aged 55 to 64 has reached a new high of 59.0% in 2010, up from 57.2% in 2009.
  4. Re-employment is a key part of the equation. Re-employment gives both employers and employees the flexibility to make necessary adjustments to employment terms and conditions to meet their respective needs. The tripartite partners have been preparing employers and employees for re-employment since 2007. Earlier this year, the Retirement and Re-employment Act was passed in Parliament. Come 1 Jan 2012, employers will be required to re-employ their eligible employees beyond the statutory minimum retirement age of 62, up to age 65. The tripartite partners also issued the revised set of Tripartite Guidelines on the Re-employment of Older Employees to facilitate the implementation of the law.

    MORE EMPLOYERS ARE TAKING RE-EMPLOYMENT SERIOUSLY
  5. Our surveys on retirement and re-employment practices show that more employers are taking re-employment seriously. Based on preliminary findings from MOM's 2010 Survey on Retirement and Re-employment Practices, the proportion of companies that allowed their employees to work past 62 has increased significantly from 64% in 2009 to 77% in 20101. 85% of private sector local employees worked in establishments that offered them opportunities to work past 62, up from 77% in 2009.
  6. Among the companies surveyed, 94% of the employees reaching the age of 62 were allowed to work further, up from 92% a year ago. I am heartened by these findings which indicate that more employers recognise the benefits that experienced and mature employees bring to their organisations and are taking steps to keep them beyond 62. More details of the survey will be released later in the year.

    RE-EMPLOYMENT IS A TRIPARTITE EFFORT
  7. This positive response on the part of employers and workers is a result of the strong tripartite partnership and effort that has driven the progress of re-employment and ensured a balanced deal for all stakeholders.
  8. Everyone has a part to play in making re-employment a success. Employers should exercise fairness in implementing re-employment; where necessary, re-designing jobs or adjusting remuneration and benefits for re-employment based on reasonable factors. Employees should be flexible and ready to accept possible adjustments and be open to training opportunities, so that they can take on new job roles and responsibilities.
  9. I urge employers, employees and unions to be flexible and adopt a collaborative approach in re-employment discussions to establish an arrangement that best meets the needs of all parties for win-win outcomes. Companies win – as they get to retain their valued older workers and remain competitive. Older employees win – as they have the opportunity to work longer, earn a regular income and build up their retirement savings. Singapore's economy wins as we can better utilize our limited manpower resources and reduce our reliance on foreign workers.
  10. We have put in place a range of resources to help employers implement re-employment. The first is the set of Tripartite Guidelines, which I urge all employers to adopt even ahead of the legislation. The second is the ADVANTAGE! Scheme, which provides a financial grant of up to $400,000 to support companies in their implementation of re-employment. The Scheme also includes a Capability Development Grant of up to $10,000 per company specifically targeted to help the SMEs develop proper HR systems to implement re-employment. The tripartite partners have published a re-employment guide for employers containing useful information on re-employment.
  11. For those who might need more help, targeted assistance is on its way. The tripartite partners will be leading an "ACCELERETE" (ACCELErating Re-Employment through Tripartite Efforts) programme to offer targeted assistance to help employers align their HR policies and re-employment practices to the Tripartite Guidelines.
  12. As part of the recent Budget announcements, the Government has also introduced a Special Employment Credit (SEC) to encourage employers to retain their older Singaporean low-wage workers. The SEC provides cash grants to employers for each month that they employ Singaporean workers aged 55 and above who earn $1,700 and below.

    COMPANIES THAT HAVE SUCCESSFULLY IMPLEMENTED RE-EMPLOYMENT
  13. Some companies already implemented re-employment before 2012 and have good practices to share. Let me introduce two of these companies to you.
  14. On Cheong Jewellery is a good example of an SME that made deliberate efforts to prepare its employees for re-employment through training and counselling. The company has implemented a Senior Employment Guidance (SEG) programme to help workers assess their financial circumstances, strengths and skills and, at the same time, explore their employment options.
  15. In addition to putting in place policies and practices to re-employ their older workers, On Cheong took a step further by re-designing their work processes, making their workplace more age-friendly. For example, they automated their sales and accounting systems and helped older staff adapt by pairing them up with younger and more tech-savvy staff. Their older employees were also open to skills upgrading through language courses and service-related training. With more than a quarter of its staff aged 62 and above, On Cheong will benefit from the valuable experience of its older employees.
  16. Another company that has successfully implemented re-employment is Tien Wah Press. To date, they have already re-employed about 40 employees. As a result, Tien Wah is able to tap on the accumulated technical knowledge of its older workers. They are now making further efforts to invest in user-friendly press and binding machines to automate processes. They also customise their on-the-job-training to cater to the literacy level of their older employees through pictorial instructions and videos.
  17. On Cheong Jewellery and Tien Wah Press are two of the many companies which have proactively and successfully implemented re-employment and have reaped early benefits of a stable and skilled mature workforce. I encourage employers who have yet to implement re-employment to learn from the experience of these employers and take active steps to implement re-employment in their organisations as soon as possible.

    CONCLUSION
  18. There will be challenges in implementing re-employment but today's seminar underscores the strong commitment of the tripartite partners in making re-employment work. We will continue to jointly get more companies, especially SMEs, on board before the law comes into effect in 2012. I am confident that when the law comes into force in 2012, it will boost the employment rate of older workers and help our companies stay competitive.
  19. With this, I wish you a fruitful seminar. Thank you.
    1 The Survey on Retirement and Re-employment Practices, 2010 was conducted by MOM’s Manpower Research and Statistics Department from September-December 2010, covering an effective sample of 3,100 private establishments each with at least 25 employees, achieving a response rate of 90%. Together, these establishments employed some 901,000 employees.