Speech at Committee of Supply 2019
Minister for Manpower Josephine Teo, Parliament House of Singapore
Labour market situation
A1. Let me start by updating members on the labour market.
A2. Overall, it improved in 2018.
a. Total employment went up.
b. Unemployment rate remains low.
c. There were fewer retrenched workers.
d. On average, workers are earning higher incomes.
A3. However, I am always mindful thatthere are residents who would like to work but have not found jobs, or those whose jobs and wages have not improved.
A4. MOM will try our best to help everyone. However, what are our challenges?
a. First, the global economic environment is more uncertain. In the fourth quarter of 2018, total employment grew but more slowly. The unemployment rate inched upwards.There could be headwinds, and as a result, MTI has moderated our growth forecast.
b. Second, we have more seniors. The employment rate for seniors has risen steadily over the years. The unemployment rate among seniors is also quite low. Still, not all seniors who want to, have jobs.
c. Third, labour market performance across sectors is uneven. There has been some restructuring, but productivity growth slowed down in 2018 compared to 2017. The gaps in some sectors are worrying. They are not keeping up with the rest of our economy and their peers in other developed countries. In the medium to longer term, what are the prospects to improve job quality and grow wages in these sectors?
A5. That is why we are moderating foreign manpower growth in Services. It was not an easy decision, but we have to spur further efforts to restructure. This was a hot topic. MPs have given their view on this move during Budget debate and MTI’s COS debate, and I will address them later.
Overview of MOM speeches
A6. But first, I will provide an overview of MOM’s responses. I will speak on three areas, how we will (a) Walk the Tech journey with our workers, (b) Provide better assurance, and (c) Support senior employment.
A7. MOS Zaqy had earlier spoken about how we uplift the wages and skills of our low-wage workers. He will elaborate on partnerships with industry and the broader community. In addition to support for low-wage workers, we should also support persons with special needs, and protect the safety and health of our workers.
A8. SPS Yen Ling will speak on our additional efforts to support women, fresh graduates, and ex-offenders in the workforce.
B. WALKING THE TECH JOURNEY WITH OUR WORKERS
Times of change
B1. By now, all of us expect technology to have far-reaching impact on industries and the future of work. In essence, our concerns are two-fold; whether there will be enough jobs, which is a question of quantity, and whether new and transformed jobs will be good jobs, which is a question of quality.
B2. On quantity of jobs, fundamentally, Singapore is labour-constrained. Technology is an overall plus for Singapore as it helps us sustain more economic activities with fewer people. Bear in mind that our local workforce today is not large enough to support all our manpower needs. Technology may make us more manpower-lean and need fewer people. But for the foreseeable future, it is unlikely to eradicate our manpower shortfalls.
B3. In fact, technology also creates new jobs that are potentially of better quality, which we should welcome.
Ms. Aryani Suhardi from Prudential (Chatbot Trainer)
B4. Take Aryani Suhardi for example, whom I met recently. For thirteen years, Aryani worked as an email correspondence consultant at Prudential’s call centre, handling queries from financial consultants. When Prudential started developing a mobile app chatbot for financial consultants, a new role was created -- someone needed to ‘train’ the chatbot to intelligently handle queries. Aryani’s years of experience handling financial consultants’ queries made her an ideal candidate for the new ‘chatbot trainer’ role.
B5. Seizing the opportunity, she learnt from a data scientist how to train the chatbot. She has been performing well as a chatbot trainer ever since, got promoted, and even started training others how to do the same. I was given a demo by Aryani and was impressed – the chatbot she trained even understands Singlish!
B6. The chatbot technology has been a plus for other Prudential call centre staff as well. The call volume at Prudential’s support centres have fallen by about 40%. As a result, customer service executives could get redeployed to new areas of growth. Those who remained no longer needed to answer routine questions but could spend more time helping callers with complex queries.
B7. This development is not unique to call centres. Across many other industries, whether manufacturing or healthcare, you will hear similar feedback from businesses and their employees. New jobs are being created and existing jobs are being improved.
B8. Our goal in Singapore must be to enable all businesses to take full advantages of technology to create new jobs and improve job quality. Just as importantly, we must walk the tech journey with workers. Help them adapt and take up new opportunities.
B9. This is not the attitude everywhere in the world. Driven by fear, there is growing resistance in some places to workplace and industry transformation.
B10. In Singapore, we are in a strong position to seize the opportunities that come with technological change. There are two main reasons for this. First, our strong fundamentals give us some leeway to shape the change. Second, we have strong tripartism at work.
B11. Instead of fanning the fear, our labour movement is ready to embrace the change with Worker 4.0. All Labour MPs led by Sec-Gen Ng Chee Meng are fully on board. I am deeply mindful that this is not a given. To keep the faith with our workers, we must do everything we can to walk the tech journey with them.
Overview of JS-related announcements in COS
B12. MOM is not alone in doing this. Other ministries and sector agencies have in fact put jobs and skills at the front and centre of their workplans. For example, as Minister Ong and SMS Chee had shared, our Institutes of Higher Learning are expanding the number of work-learn programmes. MOE also support employers’ efforts to upskill and reskill their workers, through initiatives such as NYP’s National Centre of Excellence for Workplace Learning. For MCI, Minister Iswaran spoke about efforts to maintain the skill relevancy of ICT professionals, as well as convert non-ICT professionals to take on entry-level ICT jobs through Tech Skills Accelerator (TeSA). MOH, MND and MOT will also share their efforts to strengthen worker training in the healthcare, built environment and transport sectors.
B13. In every one of the 23 ITMs, sector agencies are taking the lead in driving initiatives to meet the jobs and skills needs of the sector. Even then, realistically, not all workers will be like Aryani who is redeployed and upgraded as her employer adopts new technology. Some workers may find themselves having to move to new jobs. This may be in another company or industry. The Government cares deeply that such workers get help. They deserve our utmost support and we will do so through the Adapt and Grow initiative.
Effectiveness of A&G
B14. Time and again, we see such workers adapt to unexpected situations with remarkable courage and resilience. They pick themselves up, often with the help of their families, and sometimes with the help of our career coaches. And when they overcome their challenges, they manage to continue growing. I have met many of them, and salute them because their efforts were extraordinary. That is why I, and my colleagues at WSG, are determined that they will not be alone in this journey.
B15. Mr Lim Biow Chuan and Ms Jessica Tan asked how Adapt and Grow has helped. Last year, we helped over 30,000 jobseekers secure jobs, about 20% more than 2017. This includes placements from Adapt and Grow programmes, as well as career matching services by WSG and NTUC’s e2i. In particular, we worked closely with sector agencies to help place local PMETs in sectors with good potential for PMET jobs -- namely, Infocomm and Media, Manufacturing and Professional services, Finance and Insurance, Wholesale trade and Healthcare. Since August last year, we have also added “Built Environment” as the sixth growth sector.
B16. To better support retrenched workers, we set up a Taskforce for Responsible Retrenchment and Employment Facilitation, led by WSG. Companies are required to notify the Taskforce about upcoming retrenchments, and the Taskforce steps in to provide employment assistance to affected workers.
B17. We sometimes hear questions about whether our help has reached the right people. For example, are we able to help PMETs? Among the 30,000 jobseekers placed, more than half are PMETs. Similar to their share of our workforce.
B18. What about workers who are less qualified or older? More than 9,000 jobseekers successfully placed last year had secondary-level qualifications or below. For those aged 50 and above, there were close to 9,000; >20% increase compared to 2017.
B19. What about those unemployed for a long time? Over 60% of jobseekers placed were unemployed. Among them, close to half had been unemployed for more than 6 months.
B20. We will not forget those who have yet to find a job. It is not for want of trying. For some jobseekers, the gap with what employers want may still be quite wide, such as for experienced PMETs.
Professional Conversion Programmes (PCPs)
B21. That is why we are ramping up Professional Conversion Programmes (PCPs). There are now more than 100 PCPs in over 30 sectors. In 2018, close to 5,000 people were re-skilled and employed through PCPs, which is an increase of over 30% compared to 2017.
B22. Most of the PCP participants do well. About 9 in 10 of remained in employment 12 to 18 months after being placed. About two-thirds were recognised for their newly acquired skills, and received higher wages than before.
B23. We are also not waiting for workers to become unemployed or retrenched. We started moving upstream, to identify progressive employers prepared to re-skill their workers and put them in new jobs instead of letting them go. Last year, about 1,300 workers benefited from such redeployment efforts.
B24. I have previously highlighted the banks’ efforts to reskill and redeploy over a thousand of cashiers and tellers. Another progressive employer is Singtel. They have many desktop support staff, and foresaw the arrival of chatbots. So, they worked with WSG to gradually reskill 14 staff to take on new roles in network and system engineering. This includes sending staff with no prior technical experience, to get certified for their new roles. As Singtel embarks on digitalisation across more business functions, it is working closely with WSG to reskill at least 70 more employees to higher-value roles such as Robotic Process Automation Specialists and Digital Sales and Marketing.
B25. Whether each PCP is for a thousand or just a few, they all add up. As NTUC might put it, every redeployed worker matters.
B26. This is why we are troubled when we don’t get the same sense of urgency in some companies. Sometimes, the management themselves have not figured out future directions for the business and can’t tell workers how to align. At other times, the entire industry is not moving quickly enough.
B27. But WSG will keep trying to engage companies, and be quick to act when they are ready.
B28. Members may also come across feedback that some PCPs are over-subscribed while others could not get going. However, what is WSG’s observation? There are two. Sometimes, the job is not sufficiently attractive to job seekers. The solution is to work with employers to improve job quality through job redesign, and salary review. In other instances, there is interest from jobseekers, but employers have set too high a high bar, or may have relied too much on years of experience or academic qualifications to short-list candidates.
Digipen and Embedded Software PCP
B29. How can WSG help? A great example is the Artificial Intelligence Software Developer Attach-and-Train PCP offered by DigiPen. The take-up for the programme was initially low. Companies were looking for almost-ready candidates such as Science, Technology, Engineering, Mathematics (STEM) graduates already proficient in C++, a programming language. These hiring requirements immediately excluded mature jobseekers who were committed to reskill but had non-technical backgrounds. WSG and DigiPen convinced hirers to adjust their hiring criteria and training. They tried out 3 applicants. At the end of the 6-month programme, two had picked up the required skills and were successfully placed as Software Developers.
B30. This example shows that given the right support, mature PMETs can switch into new, technical and seemingly daunting roles. However, it also reminds us that (a) the numbers are not always big, (b) each PCP takes much time and effort to get right, and (c)even with the best efforts, not every jobseeker will get through.
Career Support Programme
B31. So we need different kinds of support. Sometimes, we need to help close the salary gap, between what the jobseeker hope to get, and what the employer is prepared to give at the start.
B32. We do this through the Career Support Programme (CSP). Last year, more than 1,200 jobseekers were placed with the help of CSP. Nearly 90% had been unemployed for more than 6 months. As the Minister for Finance announced, we will extend CSP by two years.
Career Trial Enhancements
B33. Sometimes, jobseekers and employers are unsure about each other. So we have Career Trial which Mr Patrick Tay and Dr Intan Azurah asked about. Career Trial helps jobseekers and employers get to know each other better before signing on the dotted line. Last year, about 730 jobseekers obtained jobs through this Scheme. This is an increase of over 40% compared to 2017.
B34. SMS/DSG Heng Chee How called for more support for caregivers to re-enter the workforce through part-time work. I support his call. Although Career Trial was just enhanced last year, we will further enhance it to include part-time jobs. This means that unlike previously, the jobs available for Career Trial will include both full-time and part-time jobs. We hope that this will benefit more jobseekers with care-giving responsibilities. For employers too, we hope it will help them become more comfortable with managing part-time work.
MyCareersFuture.sg’s Employer Module
B35. To help more jobseekers, WSG must itself leverage technology. Last year, we introduced MyCareersFuture.sg, which gives jobseekers a smarter and more efficient tool for skills-to-job matching.
B36. Mr Patrick Tay and Mr Lim Biow Chuan will be pleased to know that Jobs Bank and MyCareersFuture have been well utilised by both jobseekers and employers. Since its launch in April last year, the site received more than 2 million visits and over 1.7 million applications. More than 20,000 employers placed job postings on the Jobs Bank last year. Among these postings, less than 15% were to fulfil the Fair Consideration Framework (FCF) advertising requirements. In other words, the vast majority of job postings are because employers find it a useful channel.
B37. We hope the portal becomes more attractive to employers later this year, as we roll out new features. For example, employers will be able to short-list candidates based on skills to-job matching. This will also help jobseekers who may not have the right experience but have relevant skills to offer.
Areas to improve for A&G
B38. Overall, while we are encouraged by the good progress of A&G, we still have concerns about those we have not been to help. There are three areas to work on. First, the A&G initiative is relatively new, and people may not be aware of the help available. WSG and e2i together operate 5 service centres for career matching. Last year, WSG decided to bring these services to the heartlands. They call it Careers Connect On-The-Go (CCOTG) - a mobile truck that brings career matching services to different places. It helped to reach about 3,100 jobseekers from Jurong West to Tampines. We will do more to strengthen outreach.
B39. The second area of improvement is our programmes. Take PCPs, for example, which we will need more of. We will continue to launch new PCPs, but we will also revamp existing ones to be more effective.
B40. Finally, for every successful jobseeker, there is probably another who is still searching. The change in employment situation may have come too suddenly. They need time to come to terms with it. Quite often, there are other difficulties, such as tensions at home. Our career coaches are there to support. But prevention is better than cure. We should help as many as we can stay relevant so they need not be displaced at all. NTUC’s Worker 4.0 and Training Council initiatives therefore deserve strong support.
Self-Employed Persons (SEPs)
B41. Besides A&G, another way in which we walk the tech journey with workers is to better support self-employed persons1 (SEPs), which Ms Jessica Tan and Mr Chen Show Mao raised concerns about. Up to now, the much-feared tsunami of gig work has not quite materialised, certainly not in Singapore. A proxy for gig workers are our SEPs, even though most of them are in traditional occupations like taxi-driving, real-estate marketing, insurance or financial advisory. In absolute numbers, there were actually fewer SEPs2 in 2018 compared to 2017. Their share of resident workforce has also been consistent for well over a decade, at 8-10%.
B42. Part of the reason is that the labour market has improved. Compared to a year ago, the share of SEPs who prefer regular employment has fallen sharply from about 20% to below 10%3. Of those who are still SEPs, most did not try looking for regular work.
B43. The vast majority of the SEPs have told us it is their preference, and we respect it. We cannot predict how their numbers may grow in future. However, it is better to be prepared. This is why we formed a Tripartite Workgroup to recommend ways to better support SEPs.
B44. Ms Jessica Tan asked for an update on our implementation of the Workgroup’s recommendations, which I had shared at last year’s COS debate.
[SEP] Tripartite Standards on Contracting with SEP
B45. To reduce payment disputes, we launched the Tripartite Standard on Contracting with SEPs last year. Close to 500 businesses have adopted the Standard, covering 30,000 SEPs.
[SEP] Key Terms of Engagement Form Template
B46. To shape contracting norms, we have just launched a new template. SEPs can make a request to their service-buyers and put in writing the key terms of engagement.
[SEP] Skills Framework
B47. To support SEPs in adapting to technological changes, we worked with tripartite partners and sector agencies to give them access to technical skills training through the relevant Skills Frameworks. We are also supporting SEP associations, such as the Singapore Coaches Association, to develop non-technical skills training, so that SEPs are equipped to start and maintain a business.
B48. Associate Professor Dr Walter Theseira and Mr Chen Show Mao asked how our CPF system can better enable SEPs to save for their retirement and healthcare needs. Currently, SEPs are required to contribute to their MediSave accounts on an annual basis. They can additionally make voluntary CPF contributions to build up their retirement savings. However, some SEPs face difficulties even making their MediSave contributions.
B49. This is why we will introduce a "contribute-as-you-earn" (CAYE) scheme.
a. It will help SEPs make small regular contributions to MediSave instead of bigger lump-sums at year-end.
b. Government, as the service buyer, is on track to pilot CAYE from Q1 2020.
c. We will provide more details later this year.
[SEP] Prolonged Medical Leave
B50. The Workgroup had also highlighted the lack of options for SEPs to protect themselves from loss of income when they are unable to work due to illness or injury. To plug this gap, we worked with insurers to introduce Prolonged Medical Leave (PML) insurance products. NTUC Income and Gigacover have started to offer them as standalone products. Previously, there were none.
B51. We have also raised awareness among taxi and platform operators to address this concern. Grab and GoJek have been progressive by recently providing free PML insurance coverage for their regular drivers. ComfortDelGro Taxi is also considering options. These are promising developments.
B52. Mr Patrick Tay and Ms Sylvia Lim raised concerns about underemployment. This is an area we should indeed keep watch over. Internationally, the only form of underemployment which has a recognised statistical definition is time-related, defined as part-time workers who are willing and able to engage in additional hours. In Singapore, the resident time-related underemployment rate has been declining over the past decade. At 3.3% today, it is lower than in many other developed economies4.
B53. MOM is interested in tracking other forms of underemployment, such as skills-related underemployment. But today, there are no internationally recognised measures. We are therefore working closely with the International Labour Organisation to develop suitable methodologies.
B54. One possibility is to use wage or qualification-based indicators, as employed in the Ong Teng Cheong Labour Leadership Institute study that Ms Lim cited. However, we must be cautious about interpreting the study’s findings. It was based on a relatively small sample size of 1,600, with only 70 respondents identified as “underemployed”.
B55. Generally, interpreting wage or qualifications-based indicators is not straightforward. Some graduates may receive lower allowances while training for high-earning jobs (such as lawyers on training contracts). Others may have chosen to forgo a higher salary in order to invest their time and energy in their families or their passions.
B56. SPS will speak about our efforts to provide support for graduating students, so they can be meaningfully employed.
B57. Ultimately, the best way to reduce the risk of underemployment is to keep the labour market tight. When the labour market is soft, most people will consider it better to have some job rather than no job. They may also become SEPs, involuntarily.
B58. Therefore, every time we tweak labour market policies, we must always remember not to go overboard, and we should avoid weakening the labour market inadvertently.
C. ASSURANCE FOR OUR WORKERS
Tightening in the Services sector
C1. This is why the decision to tighten foreign worker policy was very carefully considered. In the end, we decided we need a stronger push to restructure and be more manpower-lean. This will sustain business growth for our companies and help to improve job quality for our workers. In the longer term, it will make our labour market more resilient. Many MPs spoke on this, and the notable exception was members from the Workers’ Party. I wonder why, given how important this is for workers? Do you support it or not?
C2. In adjusting foreign worker policy, we tried to avoid sweeping changes. First, it is in the Services sector where most restructuring is needed. Second, beyond moves already set in motion, we are not making further changes to quotas in other sectors, and levies this year.
C3. As Singapore Business Federation CEO Mr Ho Meng Kit pointed out, while there is pain, it is mostly felt by businesses already at the quota ceiling. Businesses that have found ways to rely less on foreign workers are not affected. Compared to previous rounds of tightening, we are also giving employers more time to adjust, with the changes spread out over two steps.
C4. Er Dr Lee Bee Wah asked if MOM can allow an employer to retain an existing foreign worker if it exceeds the new quotas.
a. In fact, employers will be able to retain an existing S Pass or Work Permit holder until the current pass expires.
b. At the point of work pass renewal, we will have to be fair to all employers and require them to meet the new quotas.
c. If this were not so, employers can avoid being impacted by “stocking up” to the current quota.
d. If an employer wishes to retain a specific FW instead of another whose work pass expires later, he should terminate the latter’s work pass to free up the quota so he can renew the former’s work pass in good time.
C5. MPs have expressed concerns that some Services sub-sectors will not be able to cope, and are reliant on foreign manpower because locals are unwilling to join them. We will continue to need foreign manpower in Services. However, over-reliance carries risks and is not sustainable. As their home countries develop, will all the foreign workers today always be willing to take up these jobs in Singapore? More critically, should we as a society accept that many jobs in Services are unattractive to locals? Should we not invest effort to uplift some of these jobs, to be more appealing to locals? I am glad some MPs believe we should.
C6. Some firms are already leading the way. They have re-examined where routine work can be reduced, for example, stock-taking in retail businesses. They may also reduce headcounts in back-end functions but keep people deployed in front-line roles so as to maintain good customer service. As they need fewer staff, they may be able to pay each worker more.
C7. On the Government’s part, we will continue to support firms in their transformation journey, for example through the Lean Enterprise Development (LED) scheme. This includes the enhanced and extended Enterprise Development Grant (EDG) and Productivity Solutions Grant (PSG) that Minister Chan Chun Sing talked about in his COS speech. Since 2015, we have helped more than 14,000 companies of all sizes and across sectors. If a firm commits to a transformation project that will make it more manpower-lean, but needs extra workers in the transition, we are prepared to help. We will also support firms in their efforts to build up their local pipeline, through our Adapt and Grow initiative that I spoke about earlier.
Raise Local Qualifying Salary
C8. From time to time, we hear about employers hiring locals just to meet the quotas; the local workers are not asked to do much. It is up to the worker to decide if they wish to take up such jobs. For some, they may feel it is acceptable. But for the purposes of meeting the quotas, MOM applies a simple test, and that is whether the job pays above a certain level. We call this the “Local Qualifying Salary”.
C9. As the wages of locals rise, the Local Qualifying Salary must also be regularly adjusted. Given wage trends, the Local Qualifying Salary will be raised from $1,200 currently, to $1,300 in July 2019. As in the past when LQS was raised by a similar amount, the cost impact is expected to be small.
C10. As announced at last year’s COS, the minimum qualifying salary for S Pass holders will also be increased to $2,400 from 1 Jan 2020.
Remaining open to talent while enhancing complementarity
C11. Some members have concerns whether our businesses can still compete globally. This is why even as we update our foreign workforce rules, we must remain open. There will always be expertise or specialist skills that are in demand globally, and in short supply in Singapore. Our policies must enable Singapore-based businesses to assemble the best international teams to compete on the world stage, and create more quality jobs for our people while we build the local pipeline.
Capability Transfer Programme (CTP)
C12. That is why we piloted the Capability Transfer Programme (CTP), which Mr Patrick Tay asked about. It aims to help firms quickly develop and transfer new capabilities in growth areas to our local workforce. More than 100 companies are expected to benefit from CTP-supported projects. These includes industry-level and company-specific projects in areas such as precision engineering, logistics, lift maintenance, waste management and air transport.
C13. An example is Royal Insignia. This is a traditional family-run business that creates medals and decorations for royal families. While their business was doing well, their customer base was small. Royal Insignia hoped to break into the luxury consumer market by producing new ornaments that require advanced enamelling techniques. (Enamelling is the art of applying powdered glass to metal surfaces.) As this was a rare technique, they had to consult with Russian universities and review many portfolios before finding the right expert, Daria. Over the course of 3 months last year, Daria trained 15 local employees in advanced enamelling techniques, such as the creation of 3D forms and colour gradients. As a result, the company’s product range has expanded and it is now more competitive.
Fair Consideration Framework
C14. As we keep our doors open, we must also find ways to raise quality. Members will recall that qualifying salaries for Employment Passes were raised in 2017. As a result, numbers have come down because of exits at the lower end. The effects of these changes will continue to be felt in 2019. We are not planning more moves for now, but will review the need to regularly.
C15. In the meantime, we continue to be very serious about the Fair Consideration Framework (FCF). It is to ensure local PMETs are given fair treatment in terms of hiring. From July 2018, we expanded the FCF requirement. More firms must advertise more jobs to locals before MOM will accept the Employment Pass application.
C16. Mr Patrick Tay, Mr Lim Biow Chuan, and Mr Pritam Singh asked for an update on the FCF Watchlist. There are currently 350 employers from across all sectors and firm sizes on the Watchlist. The top 5 sectors are Administrative & Support Services, Education, Infocomm, Professional Services and Wholesale Trade. We identified them as their workforce profile suggested nationality bias. The Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) also investigates feedback from the public about possible discrimination against Singaporeans.
C17. For employers found wanting, their EP applications are closely scrutinised. Since 2016, a total of 2,300 EP applications have been rejected or withheld by MOM, or withdrawn by employers.
C18. While we take a firm stance against these companies, TAFEP also works with them to improve their HR practices and support local hiring. These efforts have helped. So far, 260 firms have improved their HR practices and exited the FCF Watchlist. In addition, firms on the FCF Watchlist have hired more than 3800 Singaporean PMETs to date.
Firm that exited FCF Watchlist after making improvements
C19. One such firm operates in the Architecture and Engineering field. When it was placed on the FCF Watchlist in June 2017, the firm was not interested to work with TAFEP. After repeated attempts to engage the company failed, we curtailed its work pass privileges. This got their attention. The HR manager sent in multiple appeals to her MP to be taken off the watchlist. It claimed that the EPs were critical because they were needed for a public sector project.
C20. MOM looked into the case. We consulted with the agencies overseeing the public sector project. The company had barely tried to improve local hiring when it could have. Therefore, we had to reject their EP applications and the MPs’ appeal.
C21. In the end, the firm realised that there was no short-cut. It reached out to WSG on its training programmes, and made plans to take on interns from local polytechnics and universities. As a result of its efforts, it hired an additional 14 locals over a period of one and a half years.
C22. I know such actions by TAFEP are not popular with companies. But I hope, MPs will back us up even if they appeal to you. I can assure you that TAFEP is not vindictive. It only seeks to ensure our PMETs’ interests are properly safeguarded. Employers who are fair to locals need not worry. But if they are not, please understand why we don’t accept it.
C23. Members can be assured that we deal firmly with employers who try to be funny. For example, we keep a lookout for employers on the Watchlist who use related entities to apply for EPs to bypass our controls. For such cases, we can and have curtailed the work pass privileges of ALL the related entities.
Human Capital Partnership (HCP) Programme
C24. While we take unfair employers to task, we must also recognise fair, progressive employers. They make it a point to develop a strong local core. Which is what we look for in the Human Capital Partnership (HCP) Programme. In 2018, we recognised about 130 new HCP firms. This brings the total number of HCP firms to about 540; 40% of whom are SMEs.
C25. HCP firms’ commitment to human capital development not only benefits their employees, but also allows them to better attract and retain local talent. Today, they employ more than 190,000 locals, which is about 8% of the total local workforce. Local PMETs account for about 90% of HCP firms’ total PMET workforce. Even at the senior to top levels, more than 80% are locals.
C26. BreadTalk is an example of such a progressive company. It invests heavily in human capital development through its in-house BreadTalk University. Its local training programmes include online tutorials on food and workplace safety, Coursera subscriptions for its staff, and even curated courses with local universities. The company has also implemented role-specific career progression roadmaps for some of its frontline roles, which chart the skills needed at every level. Its progressive HR practices makes it an attractive place to work in.
D. SUPPORTING SENIOR EMPLOYMENT
D1. Mr Chairman, let me turn now to the very important topic of supporting senior employment.
WorkPro Job Redesign and Age Management Grants
D2. Mr Chong Kee Hiong asked about the WorkPro Scheme which offers the Job Redesign Grant (JRG) and the Age Management Grant (AMG) to help employers make their workplaces more age-friendly. Over 1,750 companies and about 20,000 older workers have benefitted from the Workpro JRG since it was enhanced in July 2016. Under the Workpro AMG, over 250 companies and 3,800 older workers have benefitted.
D3. Progressive employers are making it easier for seniors to work. An example is flexi-hours. Mdm Lim Swee Choon who is in her early sixties, chooses to work flexi-hours on weekdays from 830am to 330pm at Sushi Express, a progressive employer that implemented job redesign and flexible working arrangements. A former housewife, Mdm Lim returned to work after her four kids grew up. This is her first job and she enjoys being with her colleagues, many of whom are seniors as well. As everyone is well-trained in all roles, they take turns covering each other's duties and rotating between stations every week. What does she do after work? She enjoys her free time with friends, doing volunteer work at the temple, singing Karaoke or line-dancing at Community Clubs!
D4. The current WorkPro funding period will end by June 2019. We believe it remains useful. We are reviewing it and will share the results when ready.
Tripartite Workgroup on Older Workers
D5. Beyond WorkPro, there is scope to review policy.
D6. Our employment rate for seniors has, in fact, risen steadily over the years. We had raised the Retirement Age (RA) before. In 2012, we introduced re-employment after Japan started the practice. On reaching the current Retirement Age of 62, a worker must be offered at least annual re-employment by his employer up to 67, even though the job and salary may change. In practice, well over 90% of workers eligible for re-employment and who also wish to continue working are offered re-employment every year. These policy changes have helped our seniors work longer, and also helped our businesses tap a wider workforce. Compared to OECD countries, we now rank third for our employment rate for persons aged 65 and above.
D7. Some people and even member Assoc Prof Daniel Goh have called for the removal of the Retirement Age. But labour MPs have not done so. Why the difference.
D8. When a company removes the retirement age from its HR policy manual, it is good news for its workers. It means the company will not retire any employee at any age, for as long as he or she wishes to continue working.
D9. But if the retirement age is removed from the law, it is bad news. It means employers no longer have any obligation to keep their workers up to any age. In other words, any employer can retire any worker at any age.
D10. Labour MPs have studied the law and understand this crucial difference. The statutory minimum Retirement Age of 62 is actually protection for workers. Until 62, employers are not allowed to retire, or in other words dismiss a worker on account of his age. This is why NTUC calls for the RA to be raised, not removed. This will give workers protection up to an older age.
D11. Besides considering the wishes of workers, we should also understand what employers need. One reason Singapore has been able to keep employment high and unemployment low is labour market flexibility. This flexibility ultimately benefits workers, because it does not discourage employers from hiring them.
D12. This does not mean we do away with rules completely. When rules are inadequate, workers’ interests may be compromised. But when rules become too onerous, employment may suffer which is also not in workers’ interest.
D13. The Singapore way is therefore always to strike a balance, to be pro-worker and pro-business in all that we do.
D14. On key issues which concern both workers and employers, we must build a tripartite consensus that is also sustainable for the future. This is why in May last year, I formed a Tripartite Workgroup on Older Workers. Among other things, the Workgroup has been reviewing the longer-term relevance of the Retirement Age and Re-employment age.
D15. In many other countries, it has been very hard to move on these issues such as deep distrust and division prevents people from focussing on the future. We must avoid that and try to do better.
D16. The Workgroup therefore consulted widely. It heard the views of workers and unions, and has also been meeting with employers, particularly the Singapore National Employers’ Federation (SNEF). It tries to balance views on both sides, but must also consider what is right for our country.
D17. At many points in the process, there were differences. Should we only raise REA beyond 67 but not RA beyond 62? The answer was not at all clear.
D18. Recently, the Workgroup updated me on their thinking. They provided the same update to NTUC Sec-Gen Ng Chee Meng and SNEF President Dr Robert Yap; all three of us are Advisers to the Workgroup. The Workgroup needs a few more months before putting up their detailed recommendations. But we have a clear tripartite consensus.
D19. I am glad that the Workgroup believes we should raise both RA and REA. I agree with the workgroup and I will try my best to make it happen.
D20. Let me now share their 3-point agreement, which explains why.
a. First, the Retirement Age (RA) remains relevant and should go up beyond 62. This is because our people enjoy more years of good health and remain productive at work. A higher retirement age will motivate both workers and employers to invest in skills upgrading and job redesign for their older workers.
b. Second, the Re-Employment Age (REA) remains useful and should also go up beyond 67. Although most workers who are eligible get re-employed in the same job at the same pay, the flexibility to reset jobs and terms helps employers cope with business uncertainties. Employers are more willing to employ older workers because of it.
c. Third, the increases in RA and REA should be implemented in small steps over time. This is because employers will need to make considerable adjustments. They must plan ahead and step up efforts to make workplaces more age-friendly.
D21. The Workgroup cautions that even as RA and REA are raised over time, it is critical to ensure flexibility of employment arrangements. Our economy is diverse, both in terms of business models and operational needs. Workers too have different preferences and hence, we must therefore avoid being overly prescriptive when setting new rules.
D22. I am heartened by the progress made by the Workgroup, and also agree that we should carefully consider the timing and pacing of these moves. In fact, countries looking to raise their retirement ages typically make their intentions known five to ten years in advance. And each move is relatively modest. For example, Denmark’s retirement age is set to go up from 65 to 68 by 2030, over 11 years.
D23. In the next phase of its work, the Workgroup will build a tripartite consensus on (a) how far and how fast the RA and REA should be raised, and (b) the CPF contribution rates for older workers, balancing the need to help improve retirement adequacy and sustain employability for our older workers.
D24. However, one thing is clear - even when RA or REA are raised, the CPF payout eligibility age of 65 will remain unchanged at age 65. CPF members will be able to withdraw their payouts any time from age 65.
D25. Ms Foo Mee Har, Mr Png Eng Huat and Ms Sylvia Lim have asked about financial security, flexibility in use of CPF savings and CPF top-ups. Retirement adequacy is improving, for both older and younger Singaporeans. In 2018, more than 6 in 10 active CPF members turning 55 have at least the Basic Retirement Sum (BRS); this proportion will grow with each successive cohort. In 2018, over 96,000 members received about $2 billion in top-ups to their CPF accounts. We are also stepping up outreach. This year, all members turning 65 can get a personalised one-on-one CPF Retirement Planning Service at our Service Centres.
D26. We will address the issue of retirement adequacy more holistically when we discuss the Workgroup’s recommendations on CPF contributions for older workers. To sum up, I am very pleased that we have developed a tripartite consensus to raise the RA and REA. I hope Members realise what a significant milestone this is. The next phase of working out details is equally important, and I look forward to receiving the Workgroup’s final recommendations later this year.
E. SUPPORTING SENIOR EMPLOYMENT (Conclude in Mandarin)
E1. Mr Chairman, please allow me to conclude in Mandarin.
向全国职工总会 秘书长 黄志明部长、
新加坡全国雇主联合会 会长 叶进国博士，
劳资政 工作小组成员 同意，
以照顾到 雇主和员工团队的 不同需求。
E22. 企业在把握 发展契机时，
E23. 本地不少 中小型企业，
E24. 随着其他经济体 也在迅速发展，
过度依赖 越来越多的 外籍员工
收紧 服务业 可雇佣外籍员工的配额，
E26. 这次的外籍员工 配额收紧
E27. 其他行业领域的 配额依旧，
或修改 就业准证等 其他政策。
转型 是否 会更不容易呢？
是否应该 改良 一部分的工作，
未来的路 必定能 走得更远、走得更好。
E38. With your permission Mr Chairman, may I ask the clerks to distribute the handouts. Thank you.