Ministry of Manpower - Singapore Labour Market Report
The labour market in Singapore has shown signs of a turnaround as total employment grew in the third quarter this year, offsetting losses incurred in the preceding two quarters.
In fact, the latest labour market report released by the Ministry of Manpower revealed that total employment rose by 14,000 last quarter, balancing off losses of -6,200 and -7,700 in the first and second quarter of 2009 respectively, bringing the total employment back to pre-recession levels as seen in December 2008. Employment in the services and construction sectors were hiring more workers at faster rates than their previous corresponding quarters, while the manufacturing sector continued to shed more workers for the fourth consecutive quarter.
However, unemployment rate spotted an increase among the resident labour force, rising from 4.6% in June 2009 to 5.0% in September 2009. Long-term unemployment figures also rose as job seekers needed a longer time to find employment amid cautious hiring sentiments during the downturn. This resulted in the number of resident job seekers who had been looking for work for at least 25 weeks almost doubling from 9,600 in September last year to 18,400 in September 2009.
“In the current environment, it can be difficult for businesses to predict their long-term staffing needs and many have adopted a wait-and-see approach to hiring,” said Tim Hird, managing director of Robert Half Singapore. “More firms are hiring on contract / project basis, which allows them optimise their human resource costs during uncertain periods.”
This explained the 58.6% decrease in number of workers who were being made redundant from June to September 2009 (2,470), despite the increased long-term unemployment rate. Nevertheless, organisations and job seekers should not be discouraged by the slight increase in the seasonal overall and long-term unemployment rates because based on CPF records, half of the 5,980 residents retrenched last quarter were re-employed by September this year.
At the same time, job vacancies rose for the second consecutive quarter to 34,900 in September 2009, up 42% from June 2009. Although this was still slightly below the 36,000 job vacancies available in September last year, the findings presented a strong indication that more companies were positioning themselves to prepare for the recovery, with more attention focused on hiring people who can add more value in the long term.
As companies gear up for growth in 2010, employers will not only face a major challenge of meeting resourcing demands as the skills shortage deepens, but also more pressure from employees who are expecting to receive pay rises, bonuses, or better compensation packages.
“For companies that are not yet in a position to make salary adjustments or reward staff financially, constant communication of the organisation’s rationale, as well as reassurance by management of any future salary revision needs to be a top priority,” Hird said. “Employers should conduct one-on-one or group meetings with their employees to discuss the company’s goals, as well as reinforce their commitment to retain and groom their key employees”
Sources and references: Sandbox Advisors, HRO, MOM
When you use the phrase "labor shortage" or "skills shortage" you're speaking in a sentence fragment. What you actually mean to say is: "There is a labor shortage at the salary level I'm willing to pay." That statement is the correct phrase; the complete sentence and the intellectually honest statement.
Some people speak about shortages as though they represent some absolute, readily identifiable lack of desirable services. Price is rarely accorded its proper importance in their discussion.
If you start raising wages and improving working conditions, and continue doing so, you'll solve your shortage and will have people lining up around the block to work for you even if you need to have huge piles of steaming manure hand-scooped on a blazing summer afternoon.
And if you think there's going to be a shortage caused by employees retiring out of the workforce: Guess again: With the majority of retirement accounts down about 50% or more, most people entering retirement age are working well into their sunset years. So, you won’t be getting a worker shortage anytime soon due to retirees exiting the workforce.
Some specialized jobs require training and/or certification, again, the solution is higher wages and improved benefits. People will self-fund their re-education so that they can enter the industry in a work-ready state. The attractive wages, working conditions and career prospects of technology during the 1980’s and 1990’s was a prime example of people’s willingness to self-fund their own career re-education.
There is never enough of any good or service to satisfy all wants or desires. A buyer, or employer, must give up something to get something. They must pay the market price and forego whatever else he could have for the same price. The forces of supply and demand determine these prices — and the price of a skilled workman is no exception. The buyer can take it or leave it. However, those who choose to leave it (because of lack of funds or personal preference) must not cry shortage. The good is available at the market price. All goods and services are scarce, but scarcity and shortages are by no means synonymous. Scarcity is a regrettable and unavoidable fact.
Shortages are purely a function of price. The only way in which a shortage has existed, or ever will exist, is in cases where the "going price" has been held below the market-clearing price.
Hi Jolie. I agree with you that 'labour/skills shortage' is not as simple a term as it seems. It does boil down to demand/supply, however it takes time for adjustments to show effect and (similar to the economy) there are cycles of shortages and excesses. There are also various factors at play, such as the type of labour shortage, ability of firms to increase incentives to attract people, etc. For example, below is one way that we can classify different types of labour shortages. So it is an interesting and complex issue and I could go on about it but don't want to leave a comment that extends into pages
Amit
Level 1 shortage There are few people who have the essential technical skills who are not already using them and there is a long training time to develop the skills.
Level 2 shortage There are few people who have the essential technical skills who are not already using them but there is a short training time to develop the skills.
Skills mismatch There are sufficient people who have the essential technical skills who are not already using them, but they are not willing to apply for the vacancies under current conditions.
Quality gap There are sufficient people with the essential technical skills who are not already using them and who are willing to apply for the vacancies, but they lack some qualities that employers consider are important.