Primer

Crucial for Singapore to tap ageing workforce

This is the last of 12 primers on current affairs issues that are part of the outreach programme for The Straits Times-Ministry of Education National Current Affairs Quiz.

The coronavirus pandemic is crowding out pretty much everything else these days, but a sea change in Singapore's employment law that will affect everyone at some point is steadily moving ahead.

Prime Minister Lee Hsien Loong flagged the move in his National Day Rally speech last year when he announced that the statutory retirement age will be raised gradually from 62 to 65 by 2030 - the first time in 20 years it will go up.

In simple terms, it means that by the end of this decade, no boss can ask you to quit because of your age until you have reached 65.

And in another key change, the re-employment age - the point up to which bosses must continue to employ eligible staff, though on adjusted terms if necessary - will rise in tandem, from 67 now to 70.

These milestone changes are crucial because even with a pandemic that has wrought huge disruptions to many aspects of work and life, Singapore continues to chug along towards its demographic reality - an ageing society.

In fact, the working-age citizen population aged 20 to 64 is expected to peak around this year, and then start to decline. It is projected that one in four Singaporeans will be 65 and older by 2030.

Many countries face a similar trend due to low birth rates. Japan's population of those aged 65 and older already outweighs the 10-to-25 age cohort. South Korea will follow, between next year and 2023, and China by 2032, a Credit Suisse report noted.

The bottom line is that if no action is taken, the average age of people employed here will keep rising and the number of workers will fall.

Singapore Human Resources Institute (SHRI) president Low Peck Kem said this will result in a talent shortage, and while foreigners can supplement the local workforce, there is a limit due to the social cost and infrastructure impact in land-scarce Singapore.

Institute for Human Resource Professionals (IHRP) chief executive Mayank Parekh said inaction would likely hurt productivity, as well as the economy's competitiveness and growth.

It will also impact public finances as government spending on healthcare will need to increase at a time when the taxpayer base is shrinking, he said.

This is why it is crucial to tap the longevity dividend, which Professor S. Jay Olshansky from the University of Illinois at Chicago and his colleagues define as the economic and health benefits that individuals and societies would reap if the biological processes of ageing were slowed so that people enjoyed more years of good health.

The working-age citizen population aged 20 to 64 is expected to peak around this year, and then start to decline. It is projected that one in four Singaporeans will be 65 and older by 2030. If no action is taken, the average age of people employed he
The working-age citizen population aged 20 to 64 is expected to peak around this year, and then start to decline. It is projected that one in four Singaporeans will be 65 and older by 2030. If no action is taken, the average age of people employed here will keep rising and the number of workers will fall. ST FILE PHOTO

  • About The Big Quiz

  • For 12 Mondays in the Opinion section, this paper's journalists have addressed burning questions, offering unique Singaporean perspectives on complex issues.

    The primers are part of the outreach of The Straits Times-Ministry of Education National Current Affairs Quiz, or The Big Quiz, which aims to promote an understanding of local and global issues among pre-university students.

    The primers have broached contemporary issues, such as the necessary skills that will count in the post-pandemic world of work and journalism in the age of disinformation.

    Other issues included the rise and future of e-sports and why the world is abuzz over modern climate change.

    Each primer topic has given a local perspective to help students draw links to the issues' implications for Singaporeans.

    This is the final primer of the series.

    For the third year, The Big Quiz is online, allowing all pre-university students to take part in the current affairs competition, this time over six online quiz rounds - on March 30, April 13 and 27, June 15 and 29, and July 13.

    The online quizzes are based on the primer topics and are available for two weeks from the start date of each quiz.

    This nationwide event is jointly organised by The Straits Times and the Ministry of Education.

    The final round of the quiz will be available today.

National Trades Union Congress deputy secretary-general Heng Chee How said: "Longevity is an opportunity. If managed well, individuals can keep their minds and bodies sharp for many more years.

"Ageing will then be more meaningful, and mature years can be happier, with better phasing into eventual retirement. The country will also benefit from a healthier and more economically and socially engaged senior population."

LONGER RUNWAYS

Enabling older people to work longer means they can continue to earn and save for their later years, contribute to society and stay active and healthy.

Other countries are also raising retirement ages - the Organisation for Economic Cooperation and Development (OECD) average for men is expected to go from 64.2 in 2018 to 66.1 by about 2060, an OECD report noted last year.

The decision to raise the retirement and re-employment ages here came out of recommendations in a report last year by the Tripartite Workgroup on Older Workers comprising government, employer and union representatives.

One key consideration was Hale, or the health-adjusted life expectancy, which estimates the number of years a person is expected to live in good health. Singapore's Hale was 73.6 in 2016, and is projected to be 76.7 in 2030.

As people live longer, they have to be prepared for a multi-stage life, instead of the conventional way of thinking about life in three phases of education up to the early 20s, working life until the 60s and then a long retirement, Professor Andrew Scott from London Business School said at a talk in Singapore last year.

This could mean reinventing yourself at different stages, or taking more sabbaticals and breaks, or more flexible work, for instance, said Prof Scott, who co-authored the bestseller, The 100-Year Life.

But more help is needed for middle-aged and older workers who may not have refreshed their skills since leaving school.

A new initiative introduced this year encourages employers to hire and train these workers. Firms that take on a local worker aged 40 and above who has undertaken an eligible reskilling or training programme can have 40 per cent of the person's salary covered for six months, capped at $12,000 in total.

FLEXIBLE WORK

One thing the pandemic has revealed is that a lot of work can actually be done remotely and made less labour-intensive.

This is a boon for ageing societies like Singapore, as jobs can be redesigned so that seniors have more options to continue contributing productively in a safe and less physically strenuous way.

As remote working catches on, mature employees in office jobs could continue working from home.

The Government also has schemes to support flexible work. For example, the Ministry of Manpower's Work-Life Grant provides $2,000 for every local worker on flexi-work arrangements such as part-time work or shorter work weeks, up to 35 workers in each company.

The Part-Time Re-Employment Grant was introduced this year to provide up to $125,000 to companies that commit to providing part-time re-employment opportunities to eligible workers. This can cater to older people who want to continue working, but at a slower pace.

Dr Helen Ko, a senior lecturer in gerontology at the Singapore University of Social Sciences, said: "Health and technology improvements mean there are few jobs that the average 70-year-old cannot do." She added that research shows that cognitive performance does not markedly decrease until after 70 or even 80.

CHANGING ATTITUDES

Yet, experts agree that misperceptions about older workers and ageist attitudes persist.

 

For example, only 63 per cent of respondents in a poll of 1,052 people in Singapore last December felt their workplace "values all employees, regardless of age".

The average age at which careers stagnate is seen to be 48, said the survey by recruitment firm Randstad.

It has been said that some employers worry about being stuck with expensive employees and not being able to adjust their workforce to stay competitive, while some younger workers worry about being unable to progress if higher positions are never vacated.

Mindsets need to change, said IHRP's Mr Parekh: "Older workers may be more expensive, but experts say that on average, they outperform younger ones on almost every measure of job performance. They are more conscientious, less absent and have better social skills."

Dr Ko said older workers tend to have better emotional control, crisis management and problem-solving capacity, and there is no consistent evidence that suggests they are less productive than younger ones.

Employers, workers and the Government can all play a part.

Some concrete steps to improve the work experience for older employees and better tap their skills could include asking all staff to examine their unconscious biases and attitudes towards older workers, putting multi-generational teams in charge of projects, and promoting diversity within organisations, said Dr Ko.

Offering career guidance can also ensure workers continue maximising their potential.

 
 
 

In Japan and Denmark, for instance, employers commit in collective agreements to engage mature workers from the age of 40 on their career plans, while the Netherlands and Britain have schemes for workers and employers to have structured conversations on career plans and the skills and training needed, noted the Tripartite Workgroup on Older Workers in its report.

SHRI's Ms Low said employers should be clear on succession plans. "Ensure that the transition is smooth for the older worker to step aside or step down graciously, and with a high level of dignity."

A United Nations report last year noted that population ageing does not inevitably lead to macroeconomic decline.

"With well-chosen policies, just the opposite may be true," it said.

It recommended that governments support continuing and lifelong education and healthcare for all, promote employment among women and older people, including through a gradual increase in the official retirement age, and support family-friendly policies, among other things.

If Singapore is to remain a competitive and attractive economy for businesses, it needs to maintain a vibrant and productive workforce.

So, the sooner Singapore figures out how best to tap the human capital potential of an ageing workforce and improve working lives for everyone, the better.

A version of this article appeared in the print edition of The Straits Times on July 13, 2020, with the headline 'Crucial for Singapore to tap ageing workforce'. Subscribe