Layoffs highest in wholesale trade and financial services, with PMETs worst hit

The wholesale trade and financial services sectors saw the most retrenchments last year, affecting mainly professionals, managers, executives and technicians, or PMETs.

Overall, however, the number of retrenchments fell sharply to 8,020 last year from a high of 26,110 in 2020 - below pre-Covid-19 levels, according to a report by the Ministry of Manpower (MOM) yesterday.

For comparison, the number of retrenchments was higher at 10,730 in 2018 and 10,690 in 2019.

Also, the bulk of retrenchments last year was due to business reorganisation or restructuring, rather than a recession or business downturn as it was at the height of the pandemic in 2020.

The sharp drop in retrenchment numbers "mirrors what was observed in past recovery periods, where the numbers usually fall by more than 50 per cent in the year after a downturn", said the report.

There were 1,113 companies that conducted retrenchments last year, down from 1,962 in 2020.

In financial services, 1,250 employees were laid off last year, of which 1,160 were PMETs.

In wholesale trade, 1,250 employees were also retrenched, with 960 of them PMETs.

PMETs continued to form the majority of local retrenchments.

About 75 per cent of retrenched residents - citizens and permanent residents - last year were PMETs, comparable with the proportions in 2018 and 2019.

The remaining 25 per cent of non-PMETs was much lower than the 40 per cent in 2020 when industries with higher non-PMET concentration were more affected by Covid-19.

Meanwhile, a higher proportion of retrenched residents were able to secure employment.

The re-entry rate rose from 62 per cent in 2020 to 66 per cent last year - a six-year high.

The majority - 72.7 per cent - of residents who re-entered employment last year did so in a different industry, "reflecting transferable skill sets", said MOM.

While residents who were previously employed in insurance services, construction, food and beverage services, and retail trade were more likely to re-enter a similar industry, those in real estate, professional services, and community, social and personal services usually switch to a different industry.

Dr David Leong, managing director of PeopleWorldwide Consulting, said employers were competing for manpower and gearing up for growth until the Ukraine crisis put plans on hold.

"Employers generally have to pull back to consider any substantive developments that can impact business. Inflation and cost of raw materials are heading upwards and causing stress to businesses."