Laid-off workers are struggling to find new jobs as they no longer have the skills employers want.
This skills gulf highlighted by the Monetary Authority of Singapore (MAS) yesterday means good jobs are going begging in some industries while other sectors are seeing jobs disappear by the month.
The hardest-hit class of workers is PMETs - professionals, managers, executives and technicians - noted the MAS in its biannual Macroeconomic Review published yesterday.
The MAS said a combination of slow economic growth and these increasing skill mismatches is weighing on the labour market. People are also clinging to their jobs, with seasonally adjusted resignation rates at their lowest in more than seven years.
The economy is on track to log its slowest year of growth since 2009, when the global financial crisis was in full swing. There is not much hope for an upturn next year either, with global trade expected to remain weak.
OCBC economist Selena Ling said the central bank's report signals that "wage growth is going to slow, and hiring intentions are going to flatline". She added: "Ultimately, it's still a weak global growth story."
The effects of the skills gulf are being felt in the labour market, with redundancies picking up.
There were 2.4 layoffs per 1,000 workers in the first six months of this year, from 2.1 in the preceding six-month period, and well up on the 1.7 in the same period the year before, the MAS report said.
Resident workers who have been laid off have also found it harder to find new jobs.
PMETs accounted for more than two-thirds of the residents let go in the first half of this year - more than their share of the total workforce. But while more than half of the job openings in the same period were targeted at PMETs, only 39.6 per cent of laid-off resident workers in this category managed to secure a post within six months.
The solution lies in part with the workers themselves, said the MAS report. "(They) should equip themselves with the necessary skills to fill the jobs that are currently available and will be in demand in the coming years," it noted.
"These include professionals in IT, engineering and finance, as well as healthcare workers and early childhood educators. Increasingly, more specialised skills would be needed to take on these new jobs, such as capabilities in IT applications and cyber security analytics."
There is still strong hiring demand in some segments of the economy - such as tech start-ups - but candidates with the right skills are hard to come by, said Mr Ben Chew, founder of human resource platform Startup Jobs Asia.
Companies are looking for digital marketers and developers, as well as people for roles in growth hacking - which involves identifying the most effective ways to grow a business - and big data, he added.