Workers in manufacturing are most at risk of losing their jobs because the sector is gradually hollowing out, the labour movement has warned.
Two in three of the 2,212 workers who were retrenched from unionised companies last year were from this sector, the National Trades Union Congress (NTUC) said yesterday.
And the year has barely started but three manufacturing firms have already told NTUC that they will be laying off 300 workers in the next two months.
To add to the grim outlook, NTUC hinted that wage and bonus growth may also slow in other sectors, in line with the slowdown of Singapore's economic growth.
"Wages might stagnate if firms do not increase their productivity," said NTUC assistant secretary-general Cham Hui Fong in an annual press briefing on its outlook for the unionised sector yesterday.
Bonuses and wage increases shrank last year. Some 400 unionised firms gave workers an average of three months' bonus and 4.1 per cent salary increase, down from 3.16 months' bonus and a 4.63 per cent salary rise in 2013.
But it is manufacturing, which hires 540,000 workers or about 15 per cent of the labour force, where the outlook is the bleakest.
Eight firms, which were not named, shut down their manufacturing operations last year and moved to Malaysia, China and Thailand. "They choose Thailand instead of Singapore because of the abundance of workers, even though they may not have considered political stability and other factors," said Ms Cham.
Rising costs, manpower shortage and restructuring are reasons for companies pulling out, said a Singapore Manufacturing Federation spokesman.
Businesses may not be able to meet customers' demands as manufacturing companies face difficulties in hiring locals, said Mr Jeremy Fong of Fong's Engineering, as regulations on foreign labour continue to tighten.
"We still need people to operate machines even when we automate processes," he said.
Such a labour crunch will continue, said NTUC, singling out four sectors - bus transport, hotels, health care and security.
That is why efficiency is key, stressed the labour movement. In uncharacteristically strong words, NTUC hit out at firms for dragging their feet in the productivity drive.
"We have been urging employers... but the initiative must certainly come from employers," said Ms Cham, adding: "That part we are still not seeing enough.
"Our sense is that they know why (they need to raise productivity), but they do not know how (to do so)."
While the overall outlook may not be upbeat, there are some bright spots among unionised firms.
NTUC handled fewer workplace disputes - 1,922 last year compared with 2,439 in 2013. The disputes were mostly about salaries, benefits and termination. Some 90 per cent of the cases were amicably settled between unions and firms, with only 10 per cent going to the Manpower Ministry and court.
Unionised firms are also giving their staff better benefits such as marriage and family care leave.
NTUC expects more professionals, managers and executives (PMEs) to join unions this year.
Parliament is debating proposed changes to the Industrial Relations Act next Monday, which will allow rank-and-file unions to represent PMEs.