Singapore’s job market is looking gloomy as the global economic slowdown takes its toll on local industries’ hiring. A recent survey reveals that more than half of bosses are planning to cut jobs in the first quarter of this year. A Manpower employment outlook survey of 629 employers across seven industry sectors found that only 8 percent intended to recruit, while 46 percent expected to cut jobs. The rest had no plans to hire or fire, or had not made up their minds.
Net employment outlook – the percentage of employers looking to hire, minus those expecting a decrease in employment – now stands at 38 percent for the January to March period, a sharp 54 percent drop from the fourth quarter last year. Job prospects are less bullish across Asia, according to the survey, with employers in all eight countries polled reporting weaker hiring plans compared with the previous quarter and a year ago.
The slowest hiring activity is expected in Singapore and Taiwan, where negative hiring expectations are reported. Jeffrey A Joerres, chairman and chief executive of Manpower, says that the net employment outlooks from Singapore, India, Taiwan, Australia and New Zealand are the weakest recorded and contrast starkly with the previous year, when these markets “were dealing with chronic and widespread talent shortages”. A recent Reuters poll reaffirms Singapore’s grim outlook. The city-state is expected to be Asia’s worst-performing economy next year, when it is likely to remain entrenched in recession as the global downturn erodes demand for its exports.
The poll predicts gross domestic product (GDP) will contract
1.1 percent in 2009. That marks a rapid deterioration in the economic environment from two months ago, as the global financial crisis has deepened. A similar poll in late September forecast 4.6 percent GDP growth.
Singapore’s bleak performance has been the result of its exposure to the US market. The city-state became one of the earliest casualties of the US credit meltdown in Asia, when it sank into recession in the third quarter of 2008. Singapore’s openness to external trade – especially its manufacturing industry, which accounts for about a quarter of the economy – is expected to cause more suffering this year, as the downturn in advanced economies accelerates. Job losses in manufacturing will rise as a result, analysts say. Local companies are beginning to feel the pinch. Neptune Orient Lines, one of the world’s largest container carriers, recently said it would lay off 1,000 employees or 9 percent of its workforce and issued a profit warning. In a sudden move, DBS group, the largest bank in south-east Asia, said it would cut 900 jobs, or 6 percent of its staff, mostly in Singapore and Hong Kong. This, by far the biggest job cut it has made, is to reduce costs as it tries to run a tighter ship amid a challenging business environment. Philippe Capsie, country manager of Manpower Singapore, says: “As the realisation of the credit crisis begins to hit companies, employers’ hiring confidence is likewise affected. We expect companies to monitor market developments closely before making hiring decisions.”
He adds: “Employers are likely to place a higher emphasis on retaining and retraining existing staff as well as paying more attention to productivity. A number of employers will continue to hire, but job seekers are advised to be more open-minded in their job search and expectations.”
As lay-offs are expected to mount, Singapore’s policymakers are urging companies to look at creative options, such as having a shorter working week and reducing year-end bonuses. To keep workers employable, the government has also launched a S$600m training scheme, which gives employers more funds to retrain staff rather than dispense with them.
The economic crunch could also affect Singapore’s reliance on foreign workers. Lim Swee Say, secretary-general of the national trades union congress (NTUC), speaking at a recent forum, said that it may make more business sense to let go of foreign workers rather than Singaporean workers if retrenchment is unavoidable for companies.
“We’re talking about rank-and-file workers, who are, by and large, replaceable. Our message is: give priority to the local workers. Not only will you help minimise unemployment in Singapore, but more importantly, it makes business sense for your company.”
Lim added that if Singaporeans are laid off, companies may find it tough to re-employ them when the economy improves, as they will be sought by companies that must fulfill a quota of locals before they can hire foreigners.
At the same time, it is not lost on policymakers that foreign workers are necessary for companies to keep costs down and to dissuade local operators from choosing to relocate overseas.
The unemployment rate is expected to be below 3 percent with about 10,000 job losses this year. But some estimates paint a bleaker picture, predicting that job cuts could be higher than the 30,000 seen in the 1998 Asian financial crisis.