The Monetary Authority of Singapore’s (MAS) recently released its biannual Macroeconomic Review, which touched on the employment landscape in Singapore. The more we read it, the more bearish we are.
Bearish unemployment sentiments are not exactly a new story, with firms like Barclays, Standard Chartered Bank, and Nomura activating their “firing squad” as early as 2015.
Nonetheless, we would like to point out that Singapore’s overall average unemployment rate at end-2015 still remains low, from a global perspective, at 1.9%. Stripping out the foreign talents, the resident (Singapore citizens and Permanent Residents) unemployment rate is at 2.8%.
Which industries are affected?
In 2015, Singapore’s real GDP growth was at its lowest since the end of the global financial crisis (GFC) in 2009. We only grew at 2%, down from the five-year average of 4%.
The largest contributing industries to our real GDP are (1) manufacturing, (2) wholesale & retail trade and (3) finance and insurance with others making the rest of our GDP. With the global economic slowdown, we can safely say that the good-producing sector (e.g. manufacturing) is not going to fare well.
Lo and behold, it is demonstrably shown in Exhibit 1 that the manufacturing sector was a drag in our economic growth story.
Exhibit 1: Real GDP Contribution by Industry
Source: Singapore Department of Statistics
Wholesale & retail trade and finance & insurance still seen relatively good growth largely due to Singapore’s political stability, rule of law and legal services remains the best in the region (we think are one of the best in the world).
At least for those of us in the manufacturing industry, be prepared for headwinds coming our way, and it will be soon.
How much jobs were added in 2015?
2015 is a year of depressing statistics. It also the first time since the GFC where there are less than 100,000 net jobs created in a year. Only a mere 32,300 jobs were created in 2015 as compared to five-year average of 110,060.
The single industry that faced the most layoffs is expectedly, manufacturing. A total of 22,100 manufacturing employees were made redundant in 2015. The only time when manufacturing faced such high layoffs was in the midst of the GFC in 2009 at 43,900.
Of course, it would be inconclusive to just say that the layoffs are due to the deteriorating economy. We cannot denounce the fact that machinery has really made humans redundant in the manufacturing industry.
Total manufacturing jobs created between 2010 and 2014 was 14,900, this meant that the layoff in 2015 alone effectively eliminated all jobs created post-crisis, and even more.
Exhibit 2: Job Growth by Industry
Source: Ministry of Manpower
The wholesale & retail trade industry is also facing a lot of pressures. Reported by the Straits Times, retail malls are facing a reduction in tenants due to overall decrease in consumerism. This is well reflected in the reduction in employment to the negative region for the first time since 2003 by 9,400 in 2015.
Did we not hear that there are actually a lot of vacancies?
In the report, MAS said that residents that were laid off are finding it increasingly difficult to re-enter the workforce, especially the PMETs (professionals, managers, executives and technicians).
Based on a 2015 jobs report, the top two reasons cited by employers for hard-to-fill vacancies are (1) lack of necessary work experience and (2) find pay unattractive.
The two reasons are actually simple to resolve if both employers and employees are willing to compromise.
To solve point (1), employers have to stop being unrealistic in a tight labour market. Employers have got to set expectations right. If all employers are going to search for people with experience-only, then how are the fresh graduates going to attain the “experience” status?
As for point (2), employees have to stop being unrealistic with regards to pay. We blame the media and online platforms (ironic because we are an online platform) for portraying only the extreme end of the pay grade spectrum. Of course fresh graduates who managed to enter the investment banking and consulting field will be earning a truckload of cash. However, maybe only like 0.01% of total graduates are able to be so lucky. From what we heard, the only thing that these people need to balance is the balance sheet, whilst work-life balance is just a myth.
So what can we do now?
Unlike the US or the European countries, there’s such a thing called unemployment insurance and welfare benefits. In Singapore, we only have ourselves to look out for. Therefore our government’s on upgrading oneself to ensure that our resumes are competitive.
We guess we have mentioned this umpteen times that our government has given all of us free money to pursue a skill that would help us in job search going forward, called SkillsFuture.
For those PMETs equipped already with a bachelor’s or master’s degree, who finds that the courses provided by SkillsFuture are too basic, there are a lot of professional courses that will help boost your employability. Examples of such courses can range from Chartered Financial Analyst (CFA) to Visual Basic for Application (VBA).
The keynote that we are trying to bring across is for us to continuously seek knowledge DURING the course while we are employed. Only seeking for courses after unemployment takes place is already too late.
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