Retrenchments in Singapore hit a record low of 1,300 in the first quarter of this year amid a tight labour market, according to advance estimates by the Ministry of Manpower (MOM) yesterday.
The figure, which is the lowest since MOM began to collect its current series of retrenchment data in 1998, translates to six retrenched for every 10,000 employees.
This is a far cry from the more than 9,000 retrenchments seen in the third quarter of 2020 at the height of the Covid-19 pandemic, which saw the service sector hit the hardest as Singaporeans stayed home and tourist numbers dropped drastically amid curbs on nightlife, dining out and foreign travel.
Employers surveyed by MOM attributed most of the retrenchments, which were down from 1,500 in the previous quarter, to reorganisation or restructuring, the ministry said in a statement accompanying the results.
Of the 1,300, 700 were retrenched in the service sector, 500 in manufacturing and 100 in construction.
While retrenchments in the service sector declined for the sixth consecutive quarter, those in construction and manufacturing saw a moderate rise compared with the fourth quarter of last year - from 280 to 500 for manufacturing, and from 40 to 100 for construction.
MOM also said in its statement that the labour market report for the first quarter of this year is due for release in mid-June, and will provide more details, including job re-entry rates among retrenched residents, among other information, to give a fuller picture of employment trends in Singapore for the quarter.
Independent human resource consultant Adrian Tan said the decline in retrenchments in the service sector reflects its recovery amid the lifting of group size restrictions and curbs on incoming travel, among other eased measures.
"Domestically, we have entered the last phase of Covid-19, and there is pent-up demand in sectors like hospitality," said Mr Tan.
He added that the rise in retrenchments in both the construction and manufacturing sectors could be due to supply chain disruptions for raw materials and parts leading to delayed projects.
"Unlike services, manufacturing and construction require a lot of inventory.
"Projects delayed would have a detrimental effect... (When businesses) miss their projections, they may cut costs by retrenching workers."
The effect of supply chain disruptions on retrenchments in both sectors could also have been worsened by high inflation and increasing commodity prices amid the war in Ukraine, he added. "It is an unfortunate situation (that these)... things affect construction and manufacturing the worst at once."
In a Facebook post, Mr Desmond Choo, assistant secretary-general of the National Trades Union Congress, said the tight labour market is good for workers seeking to recover from lost income or a slower pace of wage growth due to the slowdown caused by Covid-19.
"This will help buffer our workers from higher costs of living too," he said.
However, Mr Choo said that structural changes in technology and business processes are evident from the latest data, citing information technology and digital services driving resident employment growth as an example.
"It is important for workers to persist in acquiring new skills to keep up with such changes."
Mr Choo, who is also an MP for Tampines GRC, said: "This is still the better security against global conflicts and supply chain crunch."
He also said that those who require help could approach staff at the Employment and Employability Institute or check out the institute's virtual career fairs.
