Even as public health concerns remain elevated, especially with the Omicron variant, the economy is showing signs of recovery. The Ministry of Trade and Industry (MTI) is forecasting GDP growth of around 7.0 percent for 2021 and 3.0 to 5.0 percent for 2022.
The labour market is also showing signs of improvement with unemployment and retrenchments declining. The Ministry of Manpower (MOM) has recently published their Labour Market Report 3Q2021 and Labour Force in Singapore Advance Release 2021.
Taking reference from these two labour market reports, here’s why 2022 may be a tough year for employers to hire.
#1 The Employment Rate For Residents Aged 15 And Above Is At Its Highest At 67.2%
If employers have been thinking that it has been hard to hire resident employees (i.e. Singapore Citizens and Singapore Permanent Residents) in 2021, they were not wrong. The resident employment rate for residents aged 25 to 64 is at a peak of 81.8% after its decline in 2020. Given that the ages 25 to 64 are the typical adult working years, 81.8% employment rate suggests that most of the resident labour force is already employed.
Even among those between the ages of 15 and 24, and those aged above 65, the employment rate are at 37.2% and 31.7% respectively. In total, the employment rate for residents aged 15 and above is at its highest at 67.2%
#2 Employment Increases Have been Driven By Certain Sectors
According to the Labour Market Report 3Q2021, resident employment increases have been driven by Information & Communications, Professional Services, Financial Services and Health & Social Services. These are sectors that have been identified earlier at the end of 2020 as sectors of sustained demand and even growth during the pandemic.
Additionally, there has been emerging employment demand from consumer and tourism-related sectors such as Food & Beverage Services, Arts, Entertainment & Recreation, Accommodation, and Retail Trade as travel and dining restrictions were gradually relaxed.
On the other hand, manpower shortages continue in Construction and Manufacturing due to ongoing border restrictions. These ongoing border restrictions have also contributed to the continued decline of non-resident employment across most industries.
Employers in the above-mentioned sectors are likely to face a double whammy of competing with industry peers for the same resident talent pool while being unable to tap on foreign manpower.
#3 There Are About 209 Job Vacancies For Every 100 Unemployed Persons
For the fifth consecutive quarter, job vacancies have increased to 98,700 in September 2021 (seasonally adjusted). As unemployment rate has also declined, the ratio of job vacancies to unemployed persons actually increased to 2.09 in September 2021, an increase from 1.63 in June.
Job vacancies rose for the fifth consecutive quarter to 98,700 in September 2021 (seasonally adjusted), though the pace of increase has slowed. Together with the decline in unemployed persons, the ratio of job vacancies to unemployed persons rose to 2.09 in September 2021, from 1.63 in June (seasonally adjusted).
The increase in vacancies was broad-based across industries, partly driven by the ongoing border restrictions. Manufacturing, Construction, Food & Beverage Services, and Administrative & Support Services, sectors which have seen substantial decreases in Work Permit holders, together accounted for 38% of all job vacancies. sustained demand from Financial Services, Professional Services, Information & Communications, and Health & Social Services, accounting for about 30% of total vacancies.
For employers looking to hire, be aware that your potential hires are likely to have plenty of choices, including switching across sectors.
#4 Median Income Of Full-Time Employed Residents Increased To $4,680 In 2021
Not only has the employment rate increased, but median income has also increased by 3.2% from $4,534 in 2020 to $4,680 in 2021 for full-time employed residents. After adjusting for inflation, the real median income was 1.1% in 2021. This increase was more than the decline of 0.4% in 2020.
Income (and wages) have rebounded and recovered from their COVID-19 decline. For employers looking to hire in 2022, the combination of a tight labour market and higher wage expectations from potential hires may lead to higher manpower cost outlay.
#5 Salary Support Schemes Such As Job Support Scheme And Job Growth Incentive Will End In 2022
While salary support schemes shouldn’t be a determinant for hiring, the Job Support Scheme (JSS), Job Growth Incentive (JGI) and SGUnited Traineeships have made hiring a less costly decision in 2020 for employers.
The enhanced JSS slated to cease by 19 December 2021 and the new hires under JGI and SGUnited Traineeships must commence by March 2022. It is unlikely that these salary support schemes would be extended further as the economy recovers.
For employers who would have curtailed their manpower hiring due to cost, the cessation of these salary support schemes may hamper their potential expansion plans.
Cover image by Moo Kar Ming
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