CNA: Employment prospects set to become vibrant this year

SINGAPORE: According to the Hudson Report, hiring expectations have not been so high since 1998 when it first started issuing such reports.

Of the over 1,500 key employment decision makers in Asia surveyed, 51 per cent of bosses expect more hiring to take place in the first quarter of this year.

This is quite a contrast indeed from the previous quarter when the figure was 34 per cent.

Last year, employees suffered pay cuts and restructuring seemed to be the order of the day. It was even worse for graduates entering the workforce for the first time.

But now, besides better hiring prospects, employees can expect more money as well. Respondents in most industries expect to pay higher salaries to attract talent. In fact, only eight per cent said they will not be increasing wages.

According to the survey, most are planning to give out much higher bonus payments this year. In fact, about 74 per cent of them plan to pay discretionary year-end bonuses for 2009.

Even though the overall mood seems buoyant, some analysts remain cautious.

Jimmy Koh, UOB economist, said: “It is recovering and it is normalising – even the expectations of hiring is a normalisation process, but it will take a while because 70 per cent of global GDP is still struggling.”

David Ang, executive director, Singapore Human Resource Institute, said: “You’ll probably get these people on contract basis, on part-time basis, on project basis and so on.

“So, while there’s increased hiring, I think one also needs to see in what way these are the permanent employment opportunity vis-a-vis other types of employment opportunities.”

The survey said hiring expectations are very high for the banking and financial sector. Another sector reflecting major expectations of job opportunities is the media, advertising and public relations industry. – CNA/vm

Labour movement gears up to go on the offensive to cut unemployment in 2010

Source: ChannelNewsAsia

SINGAPORE: It’s been a tough year on the jobs front as the global recession took its toll on Singapore’s economy.

But after a year of defensive moves designed to save jobs and prevent mass retrenchments, the labour movement is set to go on the offence next year.

It aims to reduce unemployment to below three per cent in 2010 and get to full employment as soon as possible.

Currently the unemployment rate in the third quarter of 2009 stands at 3.4 per cent.

Labour Chief Lim Swee Say said that Singapore has still performed comparably better than other parts of the world as it cut costs to save jobs and introduced schemes like Jobs Credit and Spur training.

Through the Employment and Employability Institute, about three in five jobseekers, or about 16,000, were placed in jobs and of these more than 60 per cent moved across industries.

Looking forward to the end of the year, the labour movement is hopeful that retrenchment figures will round up at 20,000 which is lower then the figures for the two previous downturns of 26,000 in 2001 and almost 30,000 in 1998.

Going forward, the labour movement also hopes to focus on three areas to boost employment next year, including among professionals, managers, executives and technicians or PMETs.

Mr Lim said: “At the end of the day, we hope re-employment rate in Singapore can be further increased, the structural employment can be further reduced and under-employment among the middle aged PMETs can be further avoided through re-skilling, re-training.”

One issue next year for firms used to getting help in keeping jobs is the withdrawal of the Jobs Credit scheme by June.

Mr Lim said the scheme is not a sustainable long-term solution and that businesses need to transform themselves to become more productive.

Still, he was hopeful that the Economic Strategies Committee or ESC report, due next month, would offer targetted help.

He added: “In the case of Jobs Credit, it applies to all companies big and small, all industries. In the case of ESC, we will expect that some of the incentive programmes will be targeted at companies that are committed to upgrade their abilities, to expand capacity.”

The Jobs Credit Scheme had previously been criticised as being too blunt a tool.

The Spur training scheme though, will remain in place for the year as Mr Lim said the bottleneck for next year is more likely to be skills development rather than job creation. – CNA/vm

42,000 unemployed find jobs through Spur

[Source: MyPaper, 23 Dec 2009]

THE report card for the Singapore Workforce Development Agency’s (WDA) Skills Programme for Upgrading and Resilience (Spur) is out.

The programme has trained more people than it aimed to,found jobs for many trainees who were unemployed, and saved countless others from being retrenched.

Started in November last year, the programme has enrolled 264,000 workers in its various training courses, exceeding the target of 220,000.

The programme also helped about 42,000 of them – unemployed citizens and permanent residents – find jobs, mainly in the food-and-beverage, cleaning, wholesale and retail-trade, manufacturing, and security sectors.

About seven in 10 were rank-and-file workers with up to secondary education. Six in 10 were aged 40 and above. In addition, more than 2,770 others were given traineeships in more than 390 firms, under a government-funded Professional Skills Programme Traineeship scheme launched in May this year.

Higher salaries in SG in 2010.

Bigger S’pore pay packets in 2010.

Good news for those who are currently in the workforce, yes. But what about those who are still struggling to find jobs?

While companies polled in the Mercer survey were reportedly optimistic about salary increases and putting an end to salary freezes, only four in 10 said they were looking to expand headcounts again.  18 months after a major global financial crisis, and despite news of economic recoveries the world over, the fact remains that there are companies that are still retrenching staff, if you talked to enough industry players. Recovery does not mean stabilization, and we can expect to see companie failures in the midst of a somewhat cautious global economic recovery– and more people may be unemployed in 2010. [FT: US jobless claims show unexpected rise]

What most people do not understand is that it takes a while for the various economic stimulus by governments to work their magic, and it wouldn’t be surprising to see joblessness rates to rise in the interim before the economy stabilizes. Job creation is highest during periods of economic stability, not recovery.

Here’s a thought though: is this the right time to be thinking about salary increases? Or could employers have directed budgets designed for better pay packages for existing staff be better invested in job creation, or improving their existing productive capabilities, or the training of staff to ensure they are better able to value-add to their organisations?

Next, who benefits most from salary increases: the top 10% earners in the organisation, or the remaining 90%? A 3.2 per cent increment to someone earning $200,000 a year is markedly more than an employee earning $40,000 a year (i.e. $6,400 vs $1,280) and unless salary increases are structured such that the bottom earners see a larger salary increment compared to the top tier earners, it is still the top earners who benefits most.

During the crisis, many companies adopted a flat-rate salary reduction across all levels, and the reverse was true: the bottom earners felt the pinch, while for the top earners, the salary freezes didn’t make much of a difference to them based on relative purchasing power parities. Now that companies are planning to “reward” staff for their sacrifices during the crisis, it is still the top earners who stand to gain more in terms of nominal salary increases.

If prudence is the way to go as we come out of this financial crisis, I would think it is more meaningful for companies to put their budgets to better use by reinvesting in themselves and improve on their operational and productive capabilities, strengthen reserves, and perhaps create new jobs, rather than think about increasing salaries too soon.

 Related:

• Merkel: economic crisis not over yet
• Irish Times: jobless rate climbs to 12.4%
• India: All’s not well, yet

5.5% growth in 2010 means…?

Key Indicators: [Source: Statistics Singapore]

• GDP up 0.6% in Q32009
• CPI down 0.8% in Oct 2009
• Total Trade down 12.4% in Oct 2009
• Retail Sales down 11.8% in Sep 2009
• Index of Industrial Production up 3.6% in Oct 2009
• Total Population 4.99M in Jun 2009
• Employment 2.95M in Sep 2009
• Unemployment Rate (SA) 3.4% in Sep 2009
• Wages/Earnings (monthly average for quarter) S$3,562

It seems that despite the economic recovery ["Singapore declares its recession over"], unemployment is still pretty much a big concern in this country. We can always analyse the statistics and say things like “unemployment persist because of structural rigidities, especially since we recently came out of recession”, but try telling a PMET who had been retrenched and unable to find a job for the past 18 months just that, and see what kind of response you would get.

In a latest survey, private sector economists (from the financial institutions, obviously) projected optimistic figures for Singapore’s growth in 2010 – 5.5% [link here] but at the same time cautioned that economic growth will likely be “subdued”.

In all honesty, I don’t think the projected growth figures make sense to understanding and solving unemployment in Singapore– for one, you were polling fund managers and financial professionals whose agenda is more aligned towards making sure their clients’ financial portfolios remain attractive for them to stay invested. There has been a long-standing assumption that a recovery in the financial markets will always trigger actual economic activity and hence growth, but don’t be misled: it’s not always the case, even if the financial dudes in pin-stripe suits driving flashy cars and working from well-furnished offices continually try to convince you thus.

For one, consider the following sentence:

They are also counting on major economies stabilising so that consumer confidence can rebound and support manufacturing and export activity here.

Granted, we are an export oriented economy. It would then appear to make sense that if the major economies stabilise, consumer spending will necessarily increase, and with our manufacturing and export levels going up, it indirectly means more jobs to go around. Hurrah.

Take a good look at the words in bold– what these financial people (I don’t even want to call them economists) are telling you is this: we have no idea IF it happens but WHEN economies like the US and Europe recover, and we are very optimistic they will come back in a big way, the whole world will be happy once again. And please publish this in front-page news headlines so more people will purchase financial products. Past performance does not guarantee future performance–check with your banker to see how we fit you into a new “global economic recovery structured note (GERN)” that will target recovering economies.

And what then, for people hoping the economic recovery will bring about more employment opportunities? Well, more or less the response will be thus: Employment? Oh, don’t worry, because we have already said the economy will recover, you will find a job– I can’t gurantee what job, but you will have one. And oh, please go and invest in GERN– do your part, stimulate the economy. Past performance does not guarantee future performance, LISTEN to your banker…oh, you’re unemployed and can’t afford? Who cares then! I’m not a freaking charity, am I??

In Economics 101, we were taught that while GDP growth is a function of Consumer Expenditure, Investment, Government Spending and Net Exports, Consumer Expenditure takes up the large gist of the pie accounting for more than 70% in some economies. If you asked me, we’re better off having more Great Singapore Sales or putting up with more roadworks in Singapore to stimulate the economy than to count on the US, European and Japanese consumers buying made-in-Singapore products, or trying to get more people invested in pseudo-Ponzi schemes.

And here’s the thing: no job, no income, where got money to spend??