Job vacancies shrink as firms turn cautious amid slowdown

MOM noted that in the recent three quarters, more employees have been placed on short work-week or temporary layoff arrangements, which are typically viewed as better alternatives to retrenchments.
MOM noted that in the recent three quarters, more employees have been placed on short work-week or temporary layoff arrangements, which are typically viewed as better alternatives to retrenchments.PHOTO: ST FILE

More staff put on temporary arrangements to reduce costs, but retrenchments fall

There was no spike in layoffs despite the economic slowdown, but job seekers faced a tougher slog in the first half of this year.

The number of job openings declined amid uncertainties, and the citizen and resident unemployment rates inched up, according to the latest labour market data released by the Ministry of Manpower (MOM) yesterday.

"Final data confirmed that employers are retaining their existing workers despite economic headwinds... At the same time, hiring sentiments have turned cautious," the ministry said in its report.

The number of job vacancies declined for the second consecutive quarter to 47,700 in June, down from 57,100 in March, after accounting for seasonal variations.

This meant that for the first time in more than a year, there were fewer job vacancies than unemployed people. In June, there were 94 vacancies for every 100 people who were unemployed.

The softer job market made it harder for residents to find a job within six months of being laid off.

This re-entry rate fell to 60 per cent in the second quarter of this year, the lowest rate in at least four years.

 
 
 
 

The seasonally adjusted unemployment rate for Singaporeans climbed for the third consecutive quarter to 3.3 per cent in June, up from 3.2 per cent in March.

For residents - Singaporeans and permanent residents combined - the rate was 3.1 per cent in June, up from 3 per cent in March, while the overall rate was stable at 2.2 per cent in June. The June unemployment figures are preliminary.

Retrenchments fell to 2,320 in the second quarter, down from 3,230 in the first quarter.

Professionals, managers, executives and technicians continued to make up the lion's share of locals who were laid off, at 77 per cent.

Companies appear to have been turning more to temporary arrangements to manage labour costs, instead of letting staff go.

In the past three quarters, more employees were placed on short work-week or temporary layoff arrangements, though levels were much lower than during recessionary periods, MOM said in a technical note in its report.

There were 970 workers on such arrangements in the second quarter. A shorter work week is where employees work fewer hours per day or fewer working days per week, while a temporary layoff is where an employee is asked to stop going to work for a short period due to lack of work.

During downturn periods, the majority of those on these arrangements were from manufacturing, and tended to be production and related workers, noted MOM.

  • 47,700 

    Number of job vacancies in June, seasonally adjusted.

  • 57,100 

    Number of job vacancies in March, seasonally adjusted.

Recruitment firm ManpowerGroup Singapore country manager Linda Teo said the arrangements allow employers to retain their experienced talent and avoid additional recruitment costs when business recovers.

"Employers should allow employees who are temporarily laid off or working shorter weeks the flexibility to find other employment to supplement their incomes. Employees can use the time freed up to learn the in-demand skills required for their role," she said.

Meanwhile, foreign employment growth, excluding maids, overtook local employment growth for the first time in three years. It was 11,600 in the first half of this year, compared with local employment growth of 5,300.

Observers said they expect the labour market to continue softening, but at a gradual pace.

"Employers are waiting to see whether the external macro headwinds are going to pass with time, They may worry that if they fire people now, they may have more difficulty hiring people again," said OCBC Bank head of treasury research and strategy Selena Ling.

National Trades Union Congress assistant secretary-general Patrick Tay said in a Facebook post: "As the labour market weakens, it will be crucial for companies and employers to partner the labour movement and our affiliated unions to upskill, reskill and second-skill workers so that they stay engaged, empowered, employed and employable."

A version of this article appeared in the print edition of The Straits Times on September 13, 2019, with the headline 'Job vacancies shrink as firms turn cautious amid slowdown'. Print Edition | Subscribe