How to gear up for the difficult economic period in Singapore's future

How to gear up for the difficult economic period in Singapore's future

One of Singapore's biggest claims to fame has been the fact that, well, the country's pretty wealthy. On the surface, it looks like everyone's either comfortably middle class or rolling in obscene amounts of money. Of course the truth isn't quite so perfect, but for a long time few people cared since the economy seemed to be chugging along nicely enough.

But it looks like Singapore's golden age of economic prosperity is over. At the beginning of the month, PM Lee cautioned that we've got a tough road ahead of us, and that this slower growth is a "new normal" Singaporeans will just have to get used to. Unlike the last financial crisis, which saw the economy bouncing back strongly, these muted economic conditions are here to stay

What does this mean for young Singaporeans who're trying to build their careers in an age where the most dramatic growth opportunities seem to have dried up?

5 things Singaporeans should do in the economic slowdown

Be willing to be flexible in your career if you're in a declining industry

One of the advantages enjoyed by baby boomers was that when they were building their careers a great many industries were expanding rapidly, and economic growth was nothing short of spectacular. A great many employees saw their salaries rise manifold just by dint of hanging out on the same role for 20 years.

These days, many employees are struggling to deal with their roles becoming obsolete, or getting outsourced to cheaper countries. Earlier this year, reports warned that retrenched, mid-career PMETs were finding it immensely difficult to find jobs. This is a phenomenon that is likely to continue.

Young Singaporeans need to accept that the employment climate is prone to sudden, dramatic changes. As such, it is imperative to be flexible when it comes to your career, and be careful not to specialise to the point of being unemployable outside your niche if your job is in danger of becoming obsolete. Make the effort to broaden your areas of expertise as that makes you more employable in other areas.

And while your parents might have stayed in the same company for 40 years, your doing so is a bad idea. Why? It is unlikely you can gain very wide-ranging experience from one single company. Changing jobs every few years will not only raise your income, but enable you to obtain a broader skill set. Should you get retrenched a few years down the road, a wider range of jobs will be available to you than if you've been doing one thing all your life.

Be prepared to work differently from the previous generation

In our parents' time, unless you were gung-ho enough to start your own company and succeed, the ticket to the good life was to get a job in an MNC, and dutifully climb the career ladder for the next few decades, retiring at the top.

Unfortunately, such opportunities aren't so easy to come by these days. Graduate numbers have swelled, and young Singaporeans are finding that a degree isn't necessarily the ticket to a high paying job in an MNC.

In addition, due to changing values and increasingly poor work-life balance, many young Singaporeans are eschewing the beaten trail in favour of new modes of working and earning money.

For starters, three in four millennials in Singapore aim to become their own boss. For some, this means becoming a start-up trail blazer, but for many more, it could mean becoming a private tutor, starting a small home-based retail business or even driving a taxi.

The freelance industry is growing, and many millennials now prefer self-employment over a stable job because it enables them to try a wider range of work and affords certain lifestyle advantages they can't get working the 9-5.

But most telling of all is the fact that fewer young people now crave that corner office at Raffles Place. Instead, Singaporeans now dream of working at tech giants like Google or Facebook, or hustling in early-stage start-ups.

While this generation of workers may not enjoy the employment climate their parents did, they have a wealth of opportunity nonetheless-just different kinds of opportunities from those we've been taught to covet at school.

A more prudent way of living is needed

In the old days, the easiest way to get rich was to spend all your savings on property, watch it accrue in value and then sell it for many times the price a decade or two later. Unfortunately, that's one road that's pretty much closed to millennials these days.

Like it or not, the days when you could get rich just by riding on the huge wave of development in Singapore are over. There aren't as many opportunities to accumulate the kind of blinding wealth in real estate and business that many of Singapore's richest families have.

That means Singaporean millennials need to be a lot more prudent with their spending. We can already see all around us, in the form of old people collecting cardboard and wiping hawker centre tables, what can happen if you don't plan for retirement in a country with no social safety net.

Right now, anyone who takes a walk at Raffles Place or on Orchard Road can see dazzling displays of consumption-Chanel handbags hang off the arms of young executives who've spent more than a months' worth of salary on them, while mainstream clubs are filled with young yuppies who think nothing of blowing $500 in a single evening.

Unfortunately, those days of plenty are over. Young Singaporeans who aren't prudent with their cash in the first decade of their career might find themselves left high and dry in a future where jobs aren't as easy to come by, and where investing in property doesn't automatically make you rich.

The article first appeared on MoneySmart


MoneySmart.sg is Singapore’s leading personal finance portal, and aims to help people maximise their money with powerful tools and engaging content.

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