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

  • The gloomy outlook in 2016 is expected to result in higher retrenchment figures, a slowdown in employment and horrible news for a whole bunch of industries.
  • NTUC has spoken: They predict that in the first quarter of 2016, 234 workers in unionised companies could be retrenched, a 31 per cent increase from the first quarter of 2015.
  • No matter how useful you think you are to your company, there's a chance your boss thinks of you, yes you, as an unnecessary cost-especially if he can just dump all your work on the guy in the next cubicle.
  • Job hopping is nothing new in Singapore, and while the employment market is still pretty robust, don't quit without another job lined up unless you're okay with the fact that it's probably going to be harder to find a new one than it was last year.
  • Employers are going to find it harder to justify hiring a new guy, so you definitely don't want to be job hunting desperately at that time.
  • If you're a business owner and haven't bothered correcting certain inefficiencies, this is the time to do it, as you could be in for some tough times.
  • While businesses across the board are likely to feel the pinch, if you're in particularly vulnerable industries like tourism and manufacturing, now is the time to see if there are more efficient, more streamlined and cheaper ways to do what you do.
  • Even if you don't find yourself unceremoniously retrenched, if your company is badly affected you can expect a smaller (or even no) bonus, as many people did during the 2008 recession, or even a pay cut.
  • This is not exactly the best time to start a designer bag collection or plan a lavish shopping trip to the factory outlets in California.
  • Everyone's investment mix is different, but if you're a stock investor who buys and holds for the long-term, this may be a good year to monitor stock prices more closely.
  • At this point, many stocks are quite heavily undervalued, and property prices are still on the decline. It's anyone guess when they'll rebound, but for now, investors should pay attention.

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.

Millennials at work

  • When you work at online cashback rewards site ShopBack, you do not have to worry about wearing proper office attire or checking your social media channels during working hours.
  • ShopBack, which gives shoppers a portion of their online spending back when they shop through the portal on sites such as fashion e-tailer Zalora and online grocer RedMart, was started by six founders under 30 years old in September 2014.
  • For the youngest of them, Ms Samantha Soh, 23, enforcing the punctuality rule has been an important way to build team spirit.
  • Its millennial employees enjoy working in the office so much that the company has "shopcations" - particularly busy periods when staff opt to stay overnight at the office rather than go home.
  • Working for Deliveroo, Mr Tristan Torres Velat has on many occasions driven a motorbike to deliver food.
  • It may be hard to imagine, but he is the general manager of the Singapore branch of the British- based food delivery firm Deliveroo.
  • He does not have a separate office and, instead, constantly rotates where he sits among his team at their shophouse space in Tanjong Pagar so that he can talk to them informally.
  • Don't be surprised if you walk into fast-fashion business, Love, Bonito's spanking new 13,000 sq ft office in Tai Seng and find half the staff surfing social media sites such as Instagram and Facebook.
  • After all, every member of the 47-person team is encouraged to be on social media to better understand the Love, Bonito customer.
  • This plugged-in and lively work culture has been 10 years in the making for the founders Viola Tan, 32, and Rachel Lim, 29. The third co-founder Velda Tan is no longer involved in the daily operations of the business.
  • Five-year-old home-grown events management firm Savour Events is opening its first international office in Shanghai.
  • The person who will be setting up the branch? Project director Andrea Yeo, 26, who has been working with the company for four years. As a project director in Shanghai, she will be handling a budget of $3.5 million.
  • Her boss, Mr Darren Chen, 37, executive director of Savour Events, has no qualms about letting her take charge of the portfolio. This sort of age-blind management is, in fact, what he was gunning for when he started Savour Events in 2012, after leaving a corporate sales position at Formula One.
  • The company, which runs Savour gourmet food festival in Singapore, comprises a millennial team of 11 who handle more than 15 large- scale gourmet events, held in Singapore as well as in places such as India, Hong Kong and China.

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.

Companies that have cut down their workforce in 2016

  • Tripda

    Rocket Internet's carpooling app, Tripda announced earlier this month that they would be organising a global shutdown of the platform.

  • Autodesk

    Autodesk a design-focused software announced early month that they will be laying off 925 positions, around 10 per cent of their entire workforce.

  • Yahoo

    Recently tech giant Yahoo confirmed that would be shedding 15 per cent of their entire workforce, and its also exploring other "strategic alternatives".

  • Yahoo

    Employees in Yahoo's Singapore office were notified of the layoffs on Feb 18.

  • Rakuten

    e-commerce platform Rakuten announced in Feb 2016 that they would be shutting down all their operations in Malaysia, Singapore and Indonesia.

  • Rakuten

    The platform probably faced a significant number of challenges in Malaysia, and they will be withdrawing to focus their efforts in countries like Japan and Taiwan.

  • Bombardier

    Bombardier will be cutting their workforce by about 7000 over the next two years.

  • Bombardier

    They will be cutting 580 jobs from their Belfast operation this year and potentially another 500 the following year.

  • Shell

    Multinational oil and gas company, Royal Dutch Shell operates in more than 70 countries and employ more than 94,000 people worldwide.

  • Shell

    Given the fact that oil prices have dropped by almost 70 per cent in less than two years, the company has already started cutting 10,000 jobs to try and recover from all their losses.

  • Devon Energy

    Devon Energy, a US oil producer, mentioned that 700 people would lose their jobs by the end of the Feb 18, 2016, and this is all in response to the current commodity price environment.

  • Top Glove

    Malaysian company Top Glove is currently the world's largest maker of natural rubber gloves with operations in 27 countries. The company announced that they would cut their foreign labour by 5 per cent due to rising costs and increasing automation.

  • Barclays

    Some 100 Barclays employees in Singapore were axed on Jan 21 in a drastic cost-cutting exercise which saw the bank exit multiple businesses across Asia.

  • Standard Chartered

    Global bank Standard Chartered had laid off a number of people in Singapore late last year as it axed 15,000 jobs globally.

  • Standard Chartered

    Its previous workforce globally was at 86,000, and currently employs about 7,000 staff in Singapore.

  • HSBC

    HSBC has announced that they will be freezing salaries and freezing hiring in 2016 globally in the battle to cut costs, affecting 3,000 Singapore employees.

  • Resorts World Sentosa

    According to a report on Straits Times, more than 30 employees at Resorts World Sentosa (RWS) have been laid off earlier in February.

  • Resorts World Sentosa

    However, the lay offs was due to overstaffing and it is not an isolated case. There are currently about 12,000 people working at Resorts World Sentosa.

  • Maersk

    Maersk Line, one of the world's top container shipping companies, recently merged its Singapore and Hong Kong regional offices. Last November, it also shared new plans to reduce its network capacity and announced that it will be cutting 4,000 jobs.

  • STMicroelectronics

    STMicroelectronics will cut about 1,400 jobs and close its loss-making set-top box business, including 670 in Asia.

  • Goldman Sachs

    Goldman Sachs has been reducing the size of its investment-banking team in Singapore by about 30 per cent compared with the start of last year, according to a report from Bloomberg.

  • Credit Suisse

    Credit Suisse announced 4,000 job cuts globally, although no layoffs are expected in the Asia-Pacific region yet.

  • Royal Bank of Scotland

    Royal Bank of Scotland has also announced that they could be cutting as many as 80 per cent of the jobs in its investment banking unit over the next 4 years, and last year laid off "hundreds" in Singapore.

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