Companies and analysts welcomed the extension of the Jobs Support Scheme (JSS) to cushion the heavy impact of the coronavirus pandemic, but added that it may not be enough on its own to save some firms, such as those in tourism.
OCBC Bank head of treasury research and strategy Selena Ling said: "Seven more months is quite generous and will help tide (over) distressed companies during these challenging times. Hopefully, by March 2021, there may be greater clarity that things are turning around."
She added that the tapering off is rather restrained as the support could have been cut by half or even not extended at all for some industries.
CIMB Private Banking economist Song Seng Wun noted that the scheme has been calibrated such that every business gets help, even those at the third tier.
"The tiered approach is practical as not all businesses can get back on their feet to the same degree. Even the 10 per cent support can help, such as to pay the Central Provident Fund contribution of staff. From an aggregate standpoint, it is about saving as many jobs as possible."
Mr Samir Bedi, EY Asean workforce advisory leader, said the scheme helps to both save and create jobs. "One of the reasons this is important is that by saving these jobs, we can retain core capabilities and skills in those (hard-hit) sectors, so eventually when businesses start recovering, we are able to retain our workers to be able to scale our efforts... The 10 per cent help for those that still have a positive outlook also creates an impetus for job creation and opportunities for... shifting the workforce to those sectors."
But while the JSS will help, firms are still not out of the woods.
Ms Ling said: "The JSS has likely helped to head off the worst of the local retrenchments... but it is still an evolving story. If demand conditions don't pick up soon, some firms may still go under and the recalibrated JSS will only buy a bit more time."
Mr Song said: "It really is to cushion the impact, which was reflected in the unemployment rate being not as bad as expected. But the rate will still rise, as vulnerable industries like aerospace face significant headwinds."
He added that companies catering mainly to tourists and those in arts and entertainment may also still suffer.
Recruitment firm EPS Consultants, which has 39 locals among its 42 workers, said the JSS defrayed the cost of retaining local staff. It falls under the third tier that will get 10 per cent support.
Director Kitty Tan said: "Our company continues to face cost pressure due to falling revenue. The 10 per cent may not be sufficient, but we will find ways to further reduce our business costs from other areas and devise ways to transform our business model."
Smart sanitary solutions company Rigel said the JSS has helped the firm retain core talents and focus its efforts on future development plans. It has about 100 workers here.
The firm, which falls under the first tier, is also looking to expand into new markets and grow business revenue.
Ms Carrie Tan, its group director of corporate development and human resources, said: "We hope the construction sector can pick up in time, in order for business activities to resume... However, if construction activities continue to be halted for a long period, then the support may not be adequate for the industry. Nonetheless, we are thankful for the extended wage support from September, which will be a great relief as the sector recovers."
Korean eatery Seoul Garden said the JSS has helped it to re-allocate its resources to areas such as job redesign, training, technology and innovation, hence creating new jobs and roles. The firm, which is in the second tier, has 200 workers.
Group general manager Garry Lam said: "Seeking new opportunities in the new normal through maximising the resources to upskill our people should be the focus, which is further enhanced and supported by the extension of JSS."