Number of lay-offs hits seven-year high last year, with 19,000 people losing their jobs, MOM data shows
Economic restructuring and slower growth took a toll on the labour market last year, which saw the highest number of layoffs since the global financial crisis in 2009.
Employment growth hit a 13-year low, while the unemployment rate for locals and the number of lay-offs also hit six- and seven-year highs respectively.
A total of 19,000 people were retrenched or had their contracts aborted last year, up from 15,580 the previous year.
Retrenchments alone hit 16,600, according to preliminary full-year data released yesterday by the Ministry of Manpower (MOM).
The impact was felt across all the three major sectors of manufacturing, construction and services. Economists said that the pain could continue for the first half of this year, before positive ripples from the recent improvement in manufacturing output - which grew 21.3 per cent year on year in December - are felt.
"The green shoots are there with the manufacturing sector doing well, but we need a couple more quarters for that to filter through to the services industries, such as professional services," said UOB economist Francis Tan.
With less upward pressure on wages last year, the median income grew by just 0.7 per cent for Singaporeans in full-time jobs, to $3,823, including employer contributions to the Central Provident Fund.
After taking negative inflation into account, the real median income growth was 1.3 per cent. This is a significant slowdown from the real growth of 7 per cent in 2015.
OCBC economist Selena Ling said this could worsen given more cautious hiring intentions.
"Real wage growth could... stagnate with headline inflation reverting to positive territory," she said.
Inflation turned positive last month for the first time in more than two years.
Over the past five years, real income growth at the 20th percentile kept pace with that at the median, at an annual average of 3.2 per cent and 3.1 per cent respectively.
For the year ahead, companies are taking a conservative approach to hiring, though there will be an increase in openings in the information technology, government and engineering sectors, said Mr Foo See Yang, managing director and country head of recruitment firm Kelly Services Singapore.
Employees should look at upgrading their skills, he added.
More people went for training last year, an official report on the resident labour force released by MOM yesterday showed.
An all-time high of 42 per cent of those aged 15 to 64 who are in the workforce attended training over the year ending June last year, up from 35 per cent in the previous year.
Ms Femke Hellemons, country manager for recruitment firm Adecco Personnel in Singapore, noted that the increase was driven by professionals, managers, executives and technicians, and training was less common in industries with more lower-skilled or seasonal workers, such as accommodation and food services, and administrative and support services.
"It is this low-skilled group that needs more support and encouragement to upskill and retrain in order to avoid getting stuck in low-paying jobs or being completely left behind in the restructuring economy," she said.
Meanwhile, Citi economist Kit Wei Zheng said he expects this year's Budget to provide support for employers through the extension of targeted wage subsidies.
He also hopes there will be an extension or enhancement of re-training schemes to alleviate long-term unemployment, which rose to a seven-year high in June last year.
This article was first published on Jan 27, 2017.
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