Ms Chew Siew Yin, 50, a production manager, had worked 28 years in the same company when she was laid off in December. The electronics manufacturer decided to move out of Singapore due to rising costs.
Still, the mother of three considers herself lucky: Her severance package and husband's salary are cushioning the loss of her $6,000 monthly income.
"We don't have many financial commitments - our car was scrapped last year and the housing loan is paid up, so we're not hit so badly," says Ms Chew, who is taking a break before job hunting.
"Some of my former colleagues have young kids or loans, and they are desperate to find a new job."
Layoffs climbed 20 per cent to 15,580 last year as restructuring, combined with the fallout from the global economic slowdown and the rise of disruptive technology, prompted more firms to let staff go.
Professionals, managers, executives and technicians (PMETs) made up over 70 per cent of those made redundant, and older workers often face the brunt of the hardship.
These worrying labour market statistics have revived a discussion about the need for measures to help retrenched people make up for the loss in income while in between jobs. Economists and Members of Parliament have pointed out that this was one area the recent Budget did not tackle.
Retrenched workers receive no automatic benefits in Singapore. In labour-tight Singapore, getting people back to work has always taken priority over relieving any temporary drop in income.
But with long-term structural unemployment expected to rise and retrenched people taking longer to find new jobs, is it time for a relook of this approach?
Short-term help for retrenched workers
Career Support ProgrammeA wage subsidy scheme to encourage employers to hire eligible job seekers for positions paying at least $4,000 and give them on-the-job training.
The Government currently foots 40 per cent of the wage bill for the first six months for those aged 50 and above, and 20 per cent for those aged 40 to 49, capped at $2,800 and $1,400, respectively. This funding is then halved for the next six months.
From next month, all Singaporean PMETs who lose their jobs and are unemployed for at least six months will qualify. Older PMETs aged 40 and up will also be eligible for the programme as soon as they are made redundant.
The new groups get 20 per cent of their wage covered for the first six months and half the funding for the next six.
ComCare Short-to-Medium Term Assistance Short-term help for those who lose their job or fall into financial difficulties. For those with a household income of $1,900 or less, or a per capita income of $650 or less.
Recipients may get a monthly cash grant, and help with rental, utilities, transport, medical bills and employment assistance.
Other ad hoc help
• Defer or reduce HDB mortgage instalments.
• Medifund for those unable to afford subsidised healthcare.
• Financial help for students' education-related costs.
• Workers may get retrenchment benefits from their companies if this is provided for under their agreements with the companies.
WHAT IS MISSING
Income support for those retrenched. In Europe, for example, unemployment benefits can cover up to 90 per cent of salary for two years. In America, the jobless may get 40 to 50 per cent of salary for up to six months.
Some academics propose that Singapore workers pay into a personal account they can draw from if jobless. This account can be made up of contributions from workers' own CPF, from employer, and Government.
HELP AVAILABLE NOW
A host of measures already exists to place retrenched workers in new jobs, or help them pick up new skills and switch careers.
SkillsFuture is a national initiative to equip workers with skills that future industries require.
Organisations such as the Singapore Workforce Development Agency and the NTUC's Employment and Employability Institute also provide career coaching and training advisory services.
Beyond these training and job-matching services, one direct solution is a recently expanded wage subsidy scheme. The Career Support Programme encourages employers to hire eligible job seekers for positions paying at least $4,000 and gives them on-the-job training. The Government co-pays 10 per cent to 40 per cent of the wages, subject to caps.
Those eligible for this wage subsidy are Singaporean PMETs aged 40 and older who are made redundant. Younger PMETs, aged below 40, who lose their jobs and have been unemployed for six months or more also qualify.
The wage subsidy measure, like the moves on retraining, are all premised on workers getting back into the job market fast. There is, however, scant help for middle-income workers who need financial assistance in between jobs.
For those with a household income of $1,900 or less, or a per capita income of $650 or less, there is the ComCare Short-to-Medium Term Assistance, which gives cash grants and offers help with rental, utilities and transport, among other things.
PMETs who have problems paying off their Housing Board loans due to short-term difficulties can ask for reduced or deferred mortgage instalment payments.
But retrenched workers typically have to rely on their own savings, and whatever retrenchment benefits are offered by employers, which depend on the company's agreement with unions or workers.
MORE CUSHIONS NEEDED
But these measures might not be sufficient to cope with an evolving employment landscape. Strong growth has kept unemployment here down to very low levels - 2 per cent to 3 per cent - in the past 30 years.
But this is changing, as the number of redundancies has been rising. Last year's 15,580 layoffs made it the highest level in six years and the fifth consecutive year of increase.
Mr Alvin Ang, who runs recruitment firm Quantum Leap Career Consultancy, says sectors like marine, oil and gas, and logistics have been hit hardest in the downturn.
"Things have been moving very fast, especially in the past five years. A lot of new businesses are less manpower-heavy," he says.
Singapore is now a mature economy entering a slower phase of growth, which means low rates of unemployment will become more difficult to sustain, says Dr Giovanni Ko, an assistant professor at Nanyang Technological University's economics division.
"In the past, the Government managed to adjust the labour market largely through the foreign workforce, but this has been shrinking and the buffer is becoming smaller," he adds.
West Coast GRC MP Patrick Tay, who chairs the Government Parliamentary Committee for Manpower, says that skills mismatch will be the main cause of unemployment in future, besides economic cycles.
For instance, the information and communications technology sector is growing fast but many retrenched workers don't have the expertise and experience to fill positions there.
This causes structural unemployment, which is caused by a mismatch between workers' skills and those demanded by employers. In contrast, cyclical unemployment is the result of booms and busts in the economy.
"Our social safety nets and our people are simply not prepared for the level of structural unemployment that is common among the developed economies," says Dr Walter Theseira, a senior lecturer at SIM University.
For instance, unemployment in the euro area has averaged almost 10 per cent since the 1990s.
The absence of such social safety nets can impose significant costs on the economy and society, notes Dr Theseira. "It encourages workers to choose less risky career paths or make less risky investment decisions, which could also mean that entrepreneurship and moving into innovative and new industries might be discouraged," he says.
"And of course there is the social cost... Families who depend on employment income will suffer when a member loses their job."
Dr Ko adds that having some unemployment benefits can help people hold out for better-paying jobs.
"Assume you're unemployed, and you're desperate. That makes you likely to take on jobs that are not a good match.
"With unemployment benefits, you can afford to wait a bit longer... There are search frictions, and you're not necessarily going to find a job that fits you in the first week," he adds.
What might a uniquely Singaporean income-support scheme for the unemployed look like?
"If we are serious about wanting PMETs to prepare for second careers and move out of sunset industries, this issue of unemployment social safety nets shouldn't be a sacred cow. We can explore a Singapore model," says OCBC economist Selena Ling.
Singapore will likely avoid the pitfalls of the European model, which is seen as giving too-generous benefits for too long, without laying down conditions of a job search.
Denmark's unemployment insurance scheme, for example, gives up to 90 per cent of past earnings for up to 104 weeks.
The fear is that generous entitlements create moral hazard, and discourage the jobless from seeking new jobs. Moral hazard refers to how people's behaviour changes when they are protected against risk.
Moral hazard can be mitigated if workers also pay for their own unemployment benefits. Here, Dr Theseira suggests a system administered through the Central Provident Fund (CPF) that relies on a combination of contributions from employees, employers, the Government and possibly unions.
"The basic idea is to have a personal unemployment insurance account that can be tapped to partially replace income in the case of a job loss," he says.
It can also be structured as a "forward loan" from a person's CPF account that needs to be repaid with interest once the retrenched worker starts a new job, says Ms Ling.
There can be limits on how frequently people can draw from the account, and a rule that people must be actively looking for a job or engaged in re-training.
Social safety nets for the unemployed can provide much needed peace of mind during a period of upheaval. With increasing churn expected in the labour market as the economy restructures, it is timely to explore a more structured approach to help retrenched workers tide over temporary income loss.
Of course, the actual implementation - such as setting up a CPF-linked fund as proposed above - will prove complex and contentious.
But it is a worthwhile effort, if the payoff is a labour market better equipped to cope with uncertainty and constant change.