The Government has accepted the recommendations of the Tripartite Committee on Employability of Older Workers to raise the age ceiling for the re-employment of older workers to 67 from 65. This will be done through promotional means supported by incentives. The idea is to give companies more time to prepare for this before legislation kicks in. The legislation will be introduced at an "appropriate time".
The PAP Seniors' Group (PAP.SG) welcomes this move, which is a progressive step and will help to boost the employment prospects of our older workers. The Government has moved to bolster the position of our seniors in health care and housing through its recent policy changes, and it makes great sense now to focus on employment. This is an important way of ensuring that our seniors remain independent and can continue to live with dignity. To be able to work for as long as they wish to and earn a steady stream of income is greatly empowering for our seniors.
Raising the rehiring age to 67 is not just good for the individual. It also makes great economic sense. It is projected that by 2030, there will be 900,000 people aged 65 years and above. If our total fertility rate remains at 1.2 and we have no immigration, there will be only 2.1 working age citizens for every citizen above the age of 65 in 2030. If we do not extend the productive working age of our older workers, our growth will be affected.
Companies, too, benefit, and much has been said about the value of older workers. In a survey conducted last year by the Tripartite Alliance for Fair Employment Practices, the majority of the companies which responded agreed that mature workers benefited them through lower turnover rates and reduced absenteeism.
While promotional means is a practical solution to give employers more time to adjust, I do hope that the Government will not take too long to legislate the extension. I have no doubt that the unions will be able to push through the extension among unionised companies, but the worry will be the non-unionised companies, where this may not be a priority. To some extent, the proposed incentives may help and are a good move, as most employers have cited costs as a concern, but the question is whether this will provide enough push for companies to voluntarily raise the ceiling.
I also hope that incentives will not have the unintended consequence of devaluing the contribution of older workers, particularly for those who would be re-employed in any case because their services are needed.
Nevertheless, to really ensure that the incentives have an impact, the Government could consider introducing a sliding scale of benefits, whereby those who come on board earlier are given more incentives compared to those who respond later. In this way, hopefully, most companies would be encouraged to raise the rehiring age ceiling faster.
According to employers, they need more time to redesign jobs and work processes and to retrain older workers. I find this surprising as such measures should already have been put in place when the rehiring age ceiling was raised to 65. There cannot be that many major changes that have to be made for the working age to be increased by just an additional two years.
Also, employers' concern about medical costs should, to a large extent, be addressed by MediShield Life that comes into effect next year, as a larger portion of hospitalisation charges will be covered. Hence, prudent employers may want to rationalise their own medical benefits scheme with MediShield Life, to address this concern.
The training of older workers is another major area in ensuring that their skills remain relevant and useful to companies' needs. There are now already available training grants and programmes that companies can tap to prepare their older workers, so that lack of skills should not be an excuse. The tripartite partners could also do a lot more to highlight positive examples of enlightened companies that have voluntarily raised the rehiring ceiling, even without any incentives.
One example is Prima. A few years ago, I officiated at an event where the company gave out long service awards to its employees. There were employees who had served the company for more than 40 years and were in their 70s. It felt really good to see a company that values its workers so much. In August last year, Prima signed a collective agreement with the Food, Drinks and Allied Workers' Union to offer 65-year-old workers, with satisfactory performance and good health, employment contracts until age 68.
I urge more companies to emulate Prima's example and waste no time in raising the rehiring age ceiling of their older workers. I am heartened, too, by the public sector's positive response to the recommendation, as its hiring practices have a deep impact on the private sector.
Finally, we need to address the concerns of older workers who have lost their jobs and are trying to get back into the workforce, which the recommendation will not cover. Among their biggest hurdles in seeking employment are hiring practices that are still biased against them. Employers should be prepared to give them a chance, rather than turn them away just because of their age.
I would like to suggest that companies hiring unemployed older workers be given incentives too, and not only those who raise the rehiring age ceiling of existing workers. It would also be useful to conduct a study on the hiring practices of companies to ascertain whether this bias really exists or whether there are other valid factors involved that affect the hiring of older workers. In this way, more effective strategies could be developed to boost older workers' chances of securing a job.
The tripartite partners have made a good move. The challenge now is to make sure that the recommendation works.
The writer is the Speaker of Parliament and chairman of the PAP Seniors' Group.