Singapore: The Labour Market in 3Q 2021

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The good news is that there seems to be an improvement in the overall labour market in 3Q 2021 as compared to the previous quarter. However, the less positive news is that recovery remains uneven across sectors. Despite some upticks in resident employment, the total employment continues to decline. The rate of decline is nothing out of the ordinary given the ongoing border restrictions. These are insights captured from the Labour Market Report released by Singapore’s Ministry of Manpower on 15 December 2021. 

  1. Smaller declines in Total Employment 

Compared to 2Q 2021, Resident Employment increased strongly by 19,100 while Non-Resident Employment declined by 21,500. Thus, despite the overall decline in total employment, it is worth noting that this downswing is significantly smaller than the previous quarter.  

Zooming into Resident Employment, its strong growth is observed to be led by outward-oriented sectors such as: Information & Communications, Professional Services and Financial Services, as well as domestically oriented sectors of Administrative & Support Services and Health & Social Services. Once again, the uneven growth across sectors remains prevalent. Sectors like Food & Beverage Services, or tourism related sectors have not caught up yet. 

With Singapore easing back into the transition of travelling, these gradual relaxation of travel and dining restrictions will play a vital role in the improvement of employment statistics in the lagging sectors. 

  1. Unemployment rates are improving; slowly but surely 

The latest data in October 2021 shows improvements in unemployment rates generally. From August to September 2021, both Resident and Citizen unemployment rate saw a slight improvement by 0.1% point, leaving Resident and Citizen unemployment rate to be 3.5% and 3.7% respectively.   

  1. Decline in Retrenchments and rising of Job Vacancies 

According to the Labour Market Report for Q3 2021, the incidence of retrenchments also fell; from 1.3 retrenchments every 1000 employees to 1.1. Furthermore, the six month re-entry rate among retrenched residents have bounced back to the rate seen in 1Q 2021, from 64% to 66%.  

While retrenchments rate decline, the ratio of job vacancies to unemployed persons are on the rise. Up from 163 job vacancies per 100 employees in June 2021, this rate has climbed to 209 job vacancies per 100 employees. 

These are the main findings from the Labour Market Report for 3Q 2021. Singapore’s labour market is generally observed to move forward along this road of recovery as we transition into 2022. However, this uneven recovery across sectors will still be in the picture. Despite the easing of dining and travel restrictions, the economic climate remains highly uncertain especially with the Omicron variant around.  

References: 

https://www.mom.gov.sg/newsroom/press-releases/2021/1215-labour-market-report-third-quarter-2021

Singapore: The Omicron variant clamping on the dream of travelling abroad

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Just as the glimmer of hope of easing into the relaxation of travel restrictions finally appear, the emergence of the new variant of Covid-19 is clamping on that dream. With rising concerns of this new variant also known as Omicron, countries are circling around the conversation of travel restrictions extremely cautiously.

Effective from 29 November 2021, Singapore has expanded its Vaccinated Travel Lane (VTL) agreements to 18 countries. This means that fully-vaccinated travellers can travel to the VTL destinations without the need to quarantine at either countries upon arrival. These countries are Germany, France, Denmark, Brunei, Italy, United Kingdom, Switzerland, The Netherlands, Spain, USA, Canada, Australia, South Korea, India, Indonesia, Malaysia, Finland and Sweden.

However, with the news of the Omicron variant spreading, this has disrupted some of these existing VTL agreements and even deferred some of the upcoming ones, such as the VTL arrangements with Qatar, Saudi Arabia and the United Arabs Emirates. From 6 December 2021, all travellers entering Singapore through the VTLs will have to take Covid-19 tests daily for a week upon arrival. This is on top of the current requirements, which are the swabs for a pre-departure test, an on-arrival polymerase chain reaction test (PCR test), as well as supervised antigen rapid tests (ARTs) on day 3 and day 7 of their visit.

Not only looking at leisure travelling, the Singapore Government released an immediate mandate on 4 December 2021 that employers of S Pass and work permit holders in construction, marine shipyard as well as process sectors will not be allowed to make new applications for their employees to enter the country via the VTL. This applies to employers of other dormitory-bound work pass holders as well.

Such workers can only enter Singapore via the ongoing initiatives specific towards construction, marine shipyard and process sectors or the Work Pass Holder General Lane for all other work pass holders where programmes with upstream testing and isolation in the source country exist.

Malaysians and female work pass holders however, will still be able to enter Singapore via the VTL but will be subjected to the prevailing health protocols. This is due to the reason that these individuals do not generally reside in dormitory environments.

Needless to say, these disruptions towards bringing in migrant workers continue to significantly contribute to the manpower crunch in the construction, marine shipyard and process sectors. Since end-2019 when Covid-19 became rampant globally, the number of work permit holders in these sectors in Singapore has declined by more than 15%.

It is clear that the battle is not won yet, thus it is necessary to take swift actions and tighten up efforts so as to stay in control of the situation. After all, prevention is better than cure, and trudging forward slowly is better than nothing.

References:

https://www.businesstimes.com.sg/government-economy/dormitory-bound-work-pass-holders-cannot-enter-singapore-via-vtl-mom

https://safetravel.ica.gov.sg/vtl/requirements-and-process

https://www.channelnewsasia.com/singapore/vtl-travellers-covid-19-testing-daily-7-days-singapore-omicron-variant-2356791

Malaysia: Clear indications of regaining momentum

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From the last update of the stagnant unemployment rate in Malaysia during July 2021 (Read about it here:https://www.linkcompliance.com/2021/09/24/malaysia-a-step-forward/), there are now clear signs of recovery as seen from the latest update in the October 2021 labor force statistics released by Malaysia’s Department of Statistics (DoSM).

The most encouraging sign is the dip in Malaysia’s unemployment rate to 4.3%; the lowest ever since April 2020. The number of unemployed persons continued to lessen month on month by 3.4%. Although it remains relatively higher than pre-pandemic periods, this is truly a step forward amidst the looming uncertainty in the pandemic. Amidst the unemployed persons in October 2021, it is found that there is a decrease of actively unemployed people (those who were available and were actively seeking jobs) from 87.1% in September to 83.6% in October 2021.

Another notable trend is the uptick in employed persons in October 2021, with a 0.6% increase on a month-on-month basis. This has been a stable trend observed year-on-year. Zooming in on the industries, the number of employed persons in the Services sector continue to see improvements. Specifically, the increase is seen in Wholesale and retail trade, Food and beverages services, information and communication as well as Transport and storage activities. Manufacturing and Construction – a hard hit sector – remained positive for the third month as well. However, Agriculture as well as the Mining and Quarrying sector are still looking at a downwards trend.

Finally, the labour participation rate stepped up with a 0.2% gain, ranking at 68.8% currently. Under the labour force indicator, it is observed that the number of female labour force climbed to 6.26 million persons from 6.25 million persons as well. This is once again an encouraging sign as Malaysia ramps up on the efforts in ensuring a level playing field for women.

All these positive signs are clear indications that the Government interventions such as the Budget 2022 are playing a crucial role in assisting the groups within the population well (Read about some of the interventions in Budget 2022 here: https://www.linkcompliance.com/2021/11/12/malaysia-creating-job-opportunities-as-the-way-forward/). With the world easing towards the resumption of interstate travel, it is anticipated that it will bring about even more positive influences to employment especially in the tourism sector. These improvements and progresses are signs of regaining the business momentum, and it applies not just to Malaysia, but most of the countries globally.

Reference:

https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=124&bul_id=VkVveHlUWm5MMTlkc3oxK2svL00rUT09&menu_id=Tm8zcnRjdVRNWWlpWjRlbmtlaDk1UT09

“Cautious”, But Optimistic Outlook for Hong Kong in 2022

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Despite the pandemic attacking in waves with variants like Delta spreading around, Hong Kong’s economy has been improving.

In a poll done in September, more than 400 companies have revealed that there would be an increase of 1.7% in pay in 2022, while more than ⅓ of the companies have plans to expand their businesses by hiring more people.

Although the increase in wages may not be as great as compared to other Asian countries like Singapore and Korea, it is still faring better than many countries outside of Asia, who are more heavily disrupted by supply-chain issues.

In addition, unemployment rates between August to October have fallen by 4.3%, with sectors like F&B, and arts and entertainment making gradual recoveries.

As for the economy, retail sales have been growing for the ninth-month straight, a positive trend that would hopefully stay positive. This is partially due to the digital vouchers the government had issued in order to boost domestic spending within the economy.

Subsequently, Hong Kong’s GDP is also forecasted to grow by 6.4% for the full year, while inflation would likely remain in check in contrast to other countries outside of Asia, despite rising import costs.

Overall, even with the slow growth in improvement, things seem to be heading upwards for Hong Kong as the world moves into endemic living. 

References:

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3157995/hong-kong-workers-set-17-cent-pay-rise-2022

https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3155863/hong-kong-economy-grows-54-cent-third-quarter

https://www.businesstimes.com.sg/government-economy/hong-kong-retail-sales-rise-for-9th-month-as-stimulus-lends-support

China & the Importance of Mobile Users

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For companies looking to push their products and online services in China, a mobile app might be where they need to start thinking from — or at the very least, a public WeChat account.

Unlike countries in the West, internet users of China (and the emerging economies within the Asia-Pacific region, really) primarily get their first dose of internet through the mobile phone, instead of desktop. The convenience of the mobile phone, relatively cheaper costs as compared to a full PC set-up, have all led to these people spending their time online primarily through the mobile phone instead of desktop, with mobile-users far outnumbering desktop users. Hence the rise of mobile apps, and subsequently, “super apps”.

What are super apps? These are apps that have it all — applications like WeChat may start off with serving a singular purpose (like messaging) before evolving to include a wide variety of functions, such as mobile wallets, social media, and even hosting mini-programs for third parties. Instead of downloading multiple apps, users only need one app to do many things at once. Other examples include Alipay, Meituan (food delivery service app) and more.

Even international corporations like Starbucks have adapted to the usage of super apps in China; Starbucks has a mini-program within WeChat that allows customers to send their orders for takeaways. Beyond that, the advancement of mobile payment in China, with even road-side food hawkers having their own QR codes, has enabled lots of shopping and retail activity to take place through mobile too, with more than 90% of sales having taken place through mobile devices.

This paints quite a different image from Western countries, where mobile payment takeup rate may be still relatively low, and online purchases made through desktop sites instead of mobile.

It is evident by now that to get anywhere in China, a channel through the mobile phone is quintessential, seeing the importance of the mobile consumers base. Companies outside of China should rethink their methods of advertising in the West, and consider opening public accounts on WeChat, providing third party mini programs and more.

References:

https://www.bbc.com/news/business-55929418

https://www.scmp.com/tech/apps-social/article/3044344/chinese-mobile-users-now-spend-over-6-hours-every-day-online-thats

https://www.spglobal.com/marketintelligence/en/news-insights/blog/china-leads-rise-of-mobile-super-apps

Are Gig Economy Workers Here to Stay?

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Long story short, the rise of neoliberalism as an ideology has led to the rise of the gig economy that we know of today. But what is the gig economy about? What is it at its very core? And more importantly, is this a sustainable form of work, here to stay in the long run? 

The rapid developments in digital communication have led to companies being ran entirely on middle-man, third-party platforms. When we talk about the gig economy, the images of food delivery workers, freelancers and more come to mind. Although freelancers have always existed before this, the pandemic has further accelerated the growth of jobs in the gig economy, with many people taking up jobs delivering food. 

Gig work can be classified according to two factors: skill level and location, thus four types overall: high skill + remote work, high skill + local work, low skill + remote work, and low skill + local work, according to Vallas & Schor. The most popular gig jobs these days, such as being a food delivery driver, is “low skill + local work”, thus many reasons why many have taken up these jobs. 

For single mothers or married women with children, they require greater flexibility in working schedules as they still have to balance childcare/caregiving, with most working women in Singapore generally having to struggle with both.  

For people with lower education, they usually do not have skills applicable for work of higher pay such as white-collar work, and to learn those skills required along with certification to deem them qualified require large amounts of money, which is what they do not have. They are thus restricted to lower paying, lower barriers to entry jobs.  

Racial and ethnic minorities do suffer in finding work in Singapore as well. In lieu of the above, gig work seems tempting: it offers a flexible schedule, it has generally lower barriers to entry, and anyone can be a Grabfood rider regardless of their race and ethnicity. The ubiquity of the internet on the phone allows anyone to join, again emphasising lower barriers to entry. 

It seems to paint a beautiful outlook for people attempting to earn more money, but is gig work as good as it seems? 

The truth about gig work and the gig economy is that it is precarious. Workers receive less legal benefits and rights from employers, as they are not classified as regular employees in the eyes of the law, rather, they are classified as “independent contractors”. In cases of countries like the US, the fight to redefine the rights the gig workers are entitled to – especially in states more focused on the protection of labour rights – emphasises the vulnerability that the workers experience. Rights and benefits a regular employee receives include paid sick leave (though very limited in number), company-sponsored skills upgrading, health insurance, and in Singapore’s case, the Central Provident Fund (CPF). They are also not protected from suddenly losing their jobs, and are very susceptible to changes in demands. For example, during Circuit Breaker last year, Grab drivers who ferry people saw a drop in their business as people avoided leaving the house as much as possible. Still, while one could point out that at the very same time food delivery services (which engage mostly gig workers) flourished at that time, one should also note that this is at an expense to their health, as they are at higher risk of being exposed to an infected person as compared to white collars who get to work entirely from home. 

There is also the fact that supply far outweighs demand in labour for the gig economy — negotiation for better prices and conditions is hard when there are always people too happy to take your place if you do not offer a lower rate, or work for lower pay, thus resulting in a downward pressure spiral on wages. 

In the long run, the lack of career progression coupled with the lack of safety nets and job security do not bode well for the future. For workers with low education levels, they lack opportunities to upgrade their skills through gig work, nor do they have companies that will provide the avenue to do so. As such, though they may be able to afford slightly nicer meals every once in a while, they are stuck doing the same low level gig work again and again. 

On the companies’ side, companies like Grab are still making losses, despite the massive volume of transactions the platform handles daily, be it through food delivery or riding services. It is still making a net loss of several hundred million, even at this stage where it’s practically a household name. Even internationally-known companies in the states like Lyft are also making losses — so really, how long can the gig economy bubble last?  

Overall, while the gig economy may be flourishing as of now, it is hard to say that this form of work will remain sustainable and profitable for both sides in the long run. 

References:  

https://www.channelnewsasia.com/business/grab-q2-2021-results-grabkitchen-deliveries-payments-2175591

https://www.gobankingrates.com/money/business/famous-companies-arent-profitable/

Covid-19 the Cause Behind Largest Fall in Employment Rate in Singapore

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According to the Ministry of Trade and Industry (MTI), the impact Covid-19 has on employment in Singapore far surpasses more than any other crisis in history, such as SARs and even the Asian Financial Crisis. 

This is because the impact of covid-19 comes in five different transmission channels, each dealing blows to the market in their own ways. 
 

The first would be the fall in international air visitors and air arrivals, affecting the aviation industry as well as tourism. 2020 saw an 85.7% drop in visitors’ arrivals as compared to 2019, due to global travel restrictions as well as border closures. In fact, most of the arrivals were concentrated largely within the first two months too, before Singapore proceeded to go into lockdown in March. As such, the aviation industry was severely affected, with Singapore Airlines (SIA) severely affected with a 98% drop in passenger travel as well as net loss of 4.27bn SGD. While other countries such as China and the USA could rely on domestic travel for recovery later on, Singapore could only rely on border reopenings as an international hub. As for the tourist industry, they had to innovate and attempt to appeal towards local residents in an attempt to reap profits from domestic tourism instead. 

In addition, the consumers-related sectors such as Food and Beverages (F&B) and services like retail are also severely impacted. Retail sales, excluding motor vehicle sales, fell by 15%. F&B sales saw a fall in sales by 26%, which marked the worst performance seen since 1986. The situation was even worse during the most severe period, the first circuit breaker when dining in was not allowed at all, with retail and F&B sales falling nearly by half. Fortunately, the rise in delivery services and eateries who were able to adapt managed to stay afloat. Physical retail stores who have successfully transitioned into offering online shopping services also found themselves staying afloat. Still, a large part of the Singaporean consumer’s pastime, aka going to the malls for food and retail, has been irreversibly changed. 

Weak external demand, as well as supply chain disruptions (which continues even today) has resulted in sectors like wholesale trade and water transport being affected too. However, it does seem to be on a road to recovery, judging by recent news of export growth rates “exploding” in 2021. 

Spillover from the slowdown of domestic economic activity has affected certain sectors in more subtle ways, with the real estate sector seeing a decrease in demand. Interestingly, the pandemic has also caused a surge in demand for life insurance, as people start to consider buying protection for themselves and their loved ones. 

Lastly, restrictions on travel as well as fall in demand across several sectors like real estate has led to a crunch in manpower, especially in foreign labour-heavy industries like construction and marine. The spread of Covid-19 in workers’ dormitories was one of such disruption, with not only economic activity decreasing, but issues like visas expiring presented further complications too. 

Overall, the most severely impacted industry in terms of employment is F&B, with a fall of 21,100 people in employment, followed by wholesale trade. However, other sectors like information and communications as well as finance and insurance saw a growth instead. 

References: 

https://www.straitstimes.com/singapore/jobs/covid-19-drove-unprecedented-drop-of-196400-in-singapore-employment-services-hardest  https://www.straitstimes.com/singapore/consumer/27-million-visitors-in-singapore-in-2020-lowest-in-four-decades-due-to-covid-19 

https://www.business-standard.com/article/international/covid-impact-singapore-airlines-report-record-full-year-loss-of-3-21-bn-121052400109_1.html

https://www.singstat.gov.sg/-/media/files/publications/industry/ssn121-pg1-5.pdf

https://www.businesstimes.com.sg/government-economy/singapore-on-track-for-highest-export-growth-in-a-decade-in-2021

https://www.channelnewsasia.com/singapore/covid-19-insurance-products-demand-long-term-impact-policies-352651

Innovation in HR: A pandemic necessity

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Covid-19 has definitely revolutionized the way we know work to be; from meetings to Zoom calls, from an office job to working from home, and so many more transformations that we have to keep ourselves on our toes to adapt to. This disruption has forced the world to be on a desperate lookout for solutions that can allow businesses to continue being sustainable and productive through this fight for a new normal. 

To keep workforces engaged through the screens, companies have taken to innovative measures in order to boost the morale of their employees and manage the sluggish effects of working from home. Gamification in HR is the new player in town. In essence, gamification in businesses mean employing game like tools to strategically aggregate certain business processes. 

Today, gamification strategies are now employed in many aspects of a business, be it externally like attracting clients, or even internally within the talent management scene. One of the most common gamifications seen in businesses are applied in their training and re-skilling processes. Through such interactive measures like employing challenges, point systems, and luring rewards, this fun element introduced into a supposedly mundane task can prove to reap great metrics like increased participation rates, greater happiness, ultimately boosting the productivity of the employee.  

In recruitment, there are businesses who utilize gamification strategies to engage candidates and assess their competency through digital game tools. Companies like Google and Unilever have developed a system that incorporates games into the recruitment process. Instead of going through piles of resumes and structured interviews, such methods can break away from the conventional routine and introduce an unbiased system that can genuinely access candidates’ abilities and thought process. 

Undoubtedly, such digital strategies will still be unable to replace that human connection and engagement that this pandemic has starved businesses of. However, such innovations will pave the way towards an engaged workforce during such disconnected times. Businesses should strive towards understanding that proactive measures should be taken to help their employees get through these times instead of through any negative reinforcements.  

References: 

https://www.forbes.com/sites/forbesbusinesscouncil/2020/07/03/combining-gamification-and-human-resources-during-a-pandemic/?sh=6a92c88d577b

Malaysia: Advancing towards gender equality

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As the society pivots towards an environment where females are recognized as equals to their male counterparts, the topic of gender equality has never been more relevant. In all levels within the society, removing barriers that oppresses women from their rights is a crucial movement that should be enforced across the world. 

The world has made considerable progress towards achieving gender equality, but despite progress made under the UN Millennium Development Goals, women are still facing the same issue across the labour markets around the world. In some parts of the world, there are laws that prevent women from working in certain jobs. Even if women get jobs, they face further obstacles such as the gender pay gap, pregnancy discrimination, and the list goes on. In essence, merely having employment opportunities is not enough to truly remove barriers for women. 

Taking a look at Malaysia, the Department of Statistics Malaysia (DOSM) released a report called Statistics on Women Empowerment in Selected Domains, Malaysia, 2021. Malaysia has expressly pledged their commitment towards promoting and achieving gender equality. Along with the Sustainable Development Goals as well as the Twelfth Malaysia Plan, there are policies that are aimed towards promoting equal employment opportunities for women. According to the Statistics on Women Empowerment in Selected Domains, the report showed that the overall gender equality in Malaysia has improved from 70.9% to 71.4% in 2020. The top three states that recorded the highest scores were W.P. Kuala Lumpur (85.3%), W.P. Putrajaya (79.3%) and Perlis (78.2%). 

It might be slightly bizarre to quantify gender equality, but these figures are presented through the Malaysia Gender Gap Index (MGGI) score. Essentially, the MGGI score identifies the gap across 4 key areas: economic participation and opportunity, educational attainment, health and survival as well as political empowerment. Based on the MGGI 2020 score, Malaysia currently ranks 74th among 156 countries around the world, and is also behind Singapore. 

Evidently, there is still lots of room for improvement in order for Malaysia to attain gender equality. This climb towards ensuring a level playing field for women is not an easy one, but it is a necessary fight. As long as there are continuous efforts from the government to prioritise this movement, gender equality need not be a faraway dream.   

References: 

https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=444&bul_id=eHMrcHQ4V1Irc0lRN0ZwM09TWDJvQT09&menu_id=L0pheU43NWJwRWVSZklWdzQ4TlhUUT09

Malaysia: Creating job opportunities as the way forward

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Themed “Malaysian Family, Prosperous and Peaceful”, Malaysia’s Budget 2022 reflects an inclusive approach to focus on economic recovery and building national resilience. It is said to be in line with the policies and strategies outlined in the 12th Malaysia Plan, with RM233.5 billion allocated for operating expenditure, RM75.6 billion for development and RM23 billion to the country’s Covid-19 fund. 

With that, the nation’s recovery strategy is laser focused on creating job opportunities and providing extra support in promoting employment. Acknowledging the severe impact of Covid-19, an allocation of RM2 billion will be set aside under the Jamin Kerja Keluarga Malaysia initiative. This is to incentivize the hiring of those unemployed, as well as providing wage subsidies for employers who hire targeted groups of Malaysians.  

Specifically, for employers who hire Malaysians that have not been actively employed in jobs with a salary of RM1500 and above, they can receive wage subsidies of up to 20 percent of the monthly salary for the first 6 months. Subsequently, an additional 30 percent wage subsidy will be presented for another 6 months.  

For employers who provide employment opportunities for Malaysians categorized as disabled or are ex-convicts, employers will receive an additional 10% in wage subsidies of the monthly salary for jobs with a salary of RM1200 and above. Another notable positive move is extending this initiative to women who have been unemployed for more than 365 days, single mothers and housewives. All these efforts are to boost Malaysia’s employment opportunities for their citizens. Under the Jarmin Kerja Keluarga Malaysia initiative, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz announced that approximately 600,000 job opportunities will be created in the process. 

With this hiring initiative, the Malaysia Budget 2022 aims to help Malaysian citizens in the transition back into the workforce. At the same time, this assists businesses in their search for talent.  

References: 

https://www.pwc.com/my/en/issues/budget2022.html

https://www.nst.com.my/news/nation/2021/10/740880/600000-jobs-under-jaminkerja-initiative-nsttv