More placed on short work weeks, temporary layoffs in Q2

More people were placed on short work weeks and temporary layoffs in the second quarter of this year, as Singapore's labour market took a hit from tightened Covid-19 restrictions.

These temporary arrangements helped to keep retrenchments low in some sectors.

Overall, the number of layoffs stayed within the pre-pandemic quarterly range in 2018 and 2019, said Permanent Secretary for Manpower Aubeck Kam at a briefing for reporters yesterday.

The Manpower Ministry's (MOM) labour market report noted that retrenchments increased in manufacturing - mainly in electronics due to restructuring and reorganisation - and construction. But layoffs fell in the services sector.

This was because sectors such as food and beverage (F&B) services, retail trade and arts, and entertainment and recreation chose to place workers on short work weeks or temporary layoffs instead.

The F&B sector was hit by stricter measures during the phase two (heightened alert) period from May 16 to June 13 when dining in was suspended. A total of 5,580 employees were placed on such temporary work arrangements in the second quarter, an increase from the 4,020 from January to March.

"While the number remained elevated compared with pre-pandemic times, the prevalence of such temporary work arrangements helped to keep retrenchments relatively low in the first half of 2021," MOM said.

Other than the F&B sector, the increase in short work weeks and temporary layoffs was also seen in air transport and support services and retail trade, affecting mainly clerical, sales and service workers.

Dr David Leong, managing director of human resources firm PeopleWorldwide Consulting, said: "The aviation, hospitality, retail and F&B services that used to employ large numbers of workers suddenly find themselves in uncertainty and limbo.

"They are not certain how the future will pan out with openings and suspensions happening unpredictably. Many of these workers shift to food delivery platforms and gig jobs to stay afloat."

On the other hand, seasonally adjusted unemployment rates continued their downward trend in June, with the unemployment rate standing at 3.7 per cent for citizens and 3.5 per cent for residents, a slight revision of the advanced estimates.

But in July, the unemployment rates ticked up to 3.9 per cent for citizens and 3.7 per cent for residents, amid a temporary easing in manpower demand in certain sectors due to the tighter Covid-19 curbs.

Mr Kam said that this is still considerable improvement since September last year, when the unemployment rates peaked.

"However, the unemployment rate rose among residents in their 40s, and for residents with degree qualifications, though they remained below the peaks we saw from the same group in 2020," he said. "We remain concerned for our mature workers, and they remain the focus of our job interventions."

As for younger degree holders, Mr Kam said that in general, MOM does not observe greater difficulties among them in securing jobs.

The resident long-term unemployment rate also dipped to 0.9 per cent in June. "Notwithstanding these improvements, the unemployment and long-term unemployment rates remain elevated," MOM said.

The six-month re-entry rate among retrenched residents dipped in the second quarter to 64 per cent from 66 per cent in the previous quarter.

But the report noted that not all groups saw a decline in re-entry rates. It rose for age groups below 50, and for clerical, sales and service workers, as well as those with degree qualifications.

The labour market recovery is expected to be uneven, as uncertainties in the external economic environment remain, MOM said.

"In particular, tourism-and aviation-related sectors are projected to see a slow recovery as travel restrictions globally are likely to be lifted cautiously... Activity in these sectors is expected to remain significantly below pre-Covid-19 levels even by the end of the year," it said.

It added that consumer-facing sectors such as F&B services and retail trade should start to recover as domestic restrictions are eased over the course of the year, but they are also not expected to return to pre-pandemic levels.

But growth prospects are strong for outward-oriented sectors like manufacturing, wholesale trade, financial and insurance services, and information and communications, due to the rebound in global demand.