SINGAPORE - The wholesale trade and financial services sectors saw the most retrenchments last year, affecting mainly professionals, managers, executives and technicians (PMETs).
Overall, however, the number of retrenchments fell sharply to 8,020 last year - from a high of 26,110 in 2020 - to below pre-Covid-19 levels. For comparison, the number of retrenchments was higher at 10,730 in 2018 and 10,690 in 2019.
Also, the bulk of retrenchments in 2021 was due to business reorganisation or restructuring, rather than recession or business downturn as it was at the height of the pandemic in 2020.
These were the findings of the annual labour market report released by the Ministry of Manpower (MOM) on Monday (March 14).
The sharp drop in retrenchment numbers mirrors what was seen 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.
For 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.
The top reason for carrying out retrenchments was reorganisation or restructuring, "as businesses make preparations to take on new growth opportunities", said MOM.
The decline in retrenchments last year was seen across all sectors. Those that saw a sizeable number of layoffs in 2020, including air transport and arts, entertainment and recreation, noted significant declines in retrenchments.
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 pre-pandemic proportions back in 2018 and 2019.
Non-PMETs made up the other 25 per cent of retrenched residents, much lower than the 40 per cent in 2020 when industries with higher non-PMET concentration were more affected by Covid-19.
Retrenchments among residents fell across all age groups, with the biggest drop coming from those 50 and older. Workers in their 40s and 50s continued to be more prone to retrenchment compared with other age groups. They were also more likely to be PMETs.
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 in 2021 - a six-year high.
A majority - 72.7 per cent - of residents who re-entered employment in 2021 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.
Nearly half - or 49.1 per cent - of those who re-entered employment last year did so within the first month, compared with 43.3 per cent in 2020.