Singapore gripped by employment squeeze
Sumathi Bala
Financial Times
Singapore’s job market
is looking gloomy as the global economic slowdown takes its toll on
local industries’ hiring. A recent survey reveals that more than half
of bosses are planning to cut jobs in the first quarter of this year. A
Manpower employment outlook survey of 629 employers across seven
industry sectors found that only 8 percent intended to recruit, while
46 percent expected to cut jobs. The rest had no plans to hire or fire,
or had not made up their minds.
Net employment outlook - the percentage of employers looking to
hire, minus those expecting a decrease in employment - now stands at 38
percent for the January to March period, a sharp 54 percent drop from
the fourth quarter last year. Job prospects are less bullish across
Asia, according to the survey, with employers in all eight countries
polled reporting weaker hiring plans compared with the previous quarter
and a year ago.
The slowest hiring activity is expected in
Singapore and Taiwan, where negative hiring expectations are reported.
Jeffrey A Joerres, chairman and chief executive of Manpower, says that
the net employment outlooks from Singapore, India, Taiwan, Australia
and New Zealand are the weakest recorded and contrast starkly with the
previous year, when these markets “were dealing with chronic and
widespread talent shortages”. A recent Reuters poll reaffirms
Singapore’s grim outlook. The city-state is expected to be Asia’s
worst-performing economy next year, when it is likely to remain
entrenched in recession as the global downturn erodes demand for its
exports.
The poll predicts gross domestic product (GDP) will contract
1.1
percent in 2009. That marks a rapid deterioration in the economic
environment from two months ago, as the global financial crisis has
deepened. A similar poll in late September forecast 4.6 percent GDP
growth.
Singapore’s bleak performance has been the result of its
exposure to the US market. The city-state became one of the earliest
casualties of the US credit meltdown in Asia, when it sank into
recession in the third quarter of 2008. Singapore’s openness to
external trade - especially its manufacturing industry, which accounts
for about a quarter of the economy - is expected to cause more
suffering this year, as the downturn in advanced economies accelerates.
Job losses in manufacturing will rise as a result, analysts say. Local
companies are beginning to feel the pinch. Neptune Orient Lines, one of
the world’s largest container carriers, recently said it would lay off
1,000 employees or 9 percent of its workforce and issued a profit
warning. In a sudden move, DBS group, the largest bank in south-east
Asia, said it would cut 900 jobs, or 6 percent of its staff, mostly in
Singapore and Hong Kong. This, by far the biggest job cut it has made,
is to reduce costs as it tries to run a tighter ship amid a challenging
business environment. Philippe Capsie, country manager of Manpower
Singapore, says: “As the realisation of the credit crisis begins to hit
companies, employers’ hiring confidence is likewise affected. We expect
companies to monitor market developments closely before making hiring
decisions.”
He adds: “Employers are likely to place a higher
emphasis on retaining and retraining existing staff as well as paying
more attention to productivity. A number of employers will continue to
hire, but job seekers are advised to be more open-minded in their job
search and expectations.”
As lay-offs are expected to mount,
Singapore’s policymakers are urging companies to look at creative
options, such as having a shorter working week and reducing year-end
bonuses. To keep workers employable, the government has also launched a
S$600m training scheme, which gives employers more funds to retrain
staff rather than dispense with them.
The economic crunch could
also affect Singapore’s reliance on foreign workers. Lim Swee Say,
secretary-general of the national trades union congress (NTUC),
speaking at a recent forum, said that it may make more business sense
to let go of foreign workers rather than Singaporean workers if
retrenchment is unavoidable for companies.
“We’re talking about
rank-and-file workers, who are, by and large, replaceable. Our message
is: give priority to the local workers. Not only will you help minimise
unemployment in Singapore, but more importantly, it makes business
sense for your company.”
Lim added that if Singaporeans are laid
off, companies may find it tough to re-employ them when the economy
improves, as they will be sought by companies that must fulfill a quota
of locals before they can hire foreigners.
At the same time, it
is not lost on policymakers that foreign workers are necessary for
companies to keep costs down and to dissuade local operators from
choosing to relocate overseas.
The unemployment rate is expected
to be below 3 percent with about 10,000 job losses this year. But some
estimates paint a bleaker picture, predicting that job cuts could be
higher than the 30,000 seen in the 1998 Asian financial crisis.
http://www.thepeninsulaqatar.com/Display_news.asp?section=Business_News&subsection=market+news...
no shit.. so is the rest of the world..
so.. your point being?
company that overexpand, will be hardest hit. with singaproe open the labour door to hundreds of thousands of foreign workers, who will be hardest hit? singaporeans or foreigners? singaporeans i suppose, coz our wages can never be lowered than foreigners.
It would depend i'm guessing.
The PAP aren't idiots, they know full well what happens if there's drastic unemployment among Singaporeans. Defacing the Parliament and dousing MPs with kerosene would only be a minor precursor to what would come then.
By opening the labour market to cheap foreign workers it would allow the companies to quickly shed manpower during a downturn without adversely destablizing the society with the retrenched and unemployed but still able to quickly regain manpower after the downturn is over.
Not saying it's the general rule. But so far it's just speculation until the actual deed is done.