Bosses seek local remedy for their labour pains

PHOTO: Bosses seek local remedy for their labour pains

SINGAPORE - If 2012 is remembered as the year of the Great Foreign Labour Squeeze, we are likely to look back at 2013 less dramatically as a year when bosses turned more decisively to locals to fill the manpower gap.

It's not as if employers will stop whining about the tighter rules for hiring foreign workers; in fact, they are likely to complain loudly this year as more restrictive rules come into effect, even as the labour market is expected to stay tight.

But unlike in 2012, when they had hoped their desperate cry - many claimed they were on the brink of business collapse - would soften official hearts and help ease the new restrictions, employers will grudgingly accept this year that the new rules are here to stay.

They will still moan and groan about them but, quietly, bosses will also step up efforts to hire locals while working to boost productivity. In fact, they have already started doing so.

In the Singapore Workforce 2012 report, the Ministry of Manpower (MOM) noted that the employment rate for Singaporeans and permanent residents hit a new high of 78.8 per cent, up from 78 per cent in 2011.

Strong job creation drew not just older Singaporeans and PRs to work, but also women. The employment rate for older men reached a record 79.7 per cent last June.

Of course, that has much to do with the Retirement and Re-employment Act (RRA) which kicked in at the start of 2012. This requires bosses to offer workers who retire at 62 the option to continue working.

Yet the squeeze on recruitment of foreign workers must have played its part, too.

In a tight labour situation - and with the door to hiring foreign workers less open - the conditions attached to re-employment under the RRA tend to be more loosely interpreted in prolonging older workers' employment. So, more could have been retained than usual.

Older workers were not the only ones who accounted for the higher resident employment rate; more younger women and men who have quit prematurely have also rejoined the workforce.

Many of the local employees and those lured back to work are in non- professional, non-managerial, non-executive and non-technical (non-PMET) jobs in the services sector - jobs most foreign workers are recruited to do.

The Singapore Workforce 2012 report revealed that non-PMET jobs rose 2.7 per cent last year - faster than the 1.5 per cent growth for PMET jobs. This broke with a decade-long trend that saw the employment of PMETs rising an average of 4.5 per cent yearly, against non-PMETs' 1.4 per cent.

The net effect: the share of PMETs in resident employment dipped from 52.2 per cent in 2011 to 51.9 per cent in 2012. Will this continue in 2013?

The big jumps in employment in recent years have benefited all workers, but mostly PMETs. Many of the jobs created were for the better educated and better trained. If employment growth eases, PMETs will be the first to be affected.

While the job market remained tight with the unemployment rate dipping from 2 per cent in the second quarter of 2012 to 1.9 per cent in September - near its all-time low of 1.7 per cent - job growth was practically flat in the first nine months of 2012 when compared with a year ago. And the number of jobs created tapered off and layoffs jumped to a pre-recession high in the third quarter as the economy lost steam.

Will the decline extend into 2013?

The job market held up in 2012 despite a weak economy, thanks largely to the tighter foreign-worker policy. As the government goes all out to enforce the policy in the coming year, the policy will also continue to help prop up the demand for local labour, especially for older workers and women.

Job experts seem split in their outlook for 2013. Employment consultancy Manpower Singapore's poll shows eight in 10 employers planning to keep their headcount unchanged in the first three months of this year. A survey by the Hay Group, on the other hand, found 58 per cent of the employers covered intend to raise their staff level in the 12 months ahead, up from 50 per cent a year ago.

Acting Manpower Minister Tan Chuan-Jin takes a middle path that's likely to be more plausible. He says the demand for workers in 2013 will continue to be buoyant for certain sectors.

It's no coincidence that many of these are also sectors still feeling the pinch of the foreign-labour squeeze.