Redundancy and Re-Entry Into Employment, 2012

Incidence of redundancy rose in 2012, but remained low

25 April 2013

1. Reflecting the impact of economic slowdown and restructuring, the incidence of redundancy increased slightly, but remained at the lower end of the range. The increase took place amid a rise in overall employment over the year. Meanwhile, the rate of re-entry into employment declined slightly after rising in 2011, though it stayed above recessionary levels. These are the key findings from the “Redundancy and Re-Entry into Employment, 2012” report released by the Ministry of Manpower’s Research and Statistics Department.
2. 11,010 workers were made redundant in 2012, up 10% from 9,990 in 2011¹. This translated to 5.8 workers affected per 1,000 employees, up slightly from 5.5 per 1,000 in 2011. This remained at the lower end of the range for non-recessionary years and substantially below the recessionary highs of 11 and 14 workers laid off for every 1,000 employees in 2008 and 2009 respectively.
3. Professionals, managers, executives & technicians (PMETs) have become more vulnerable to redundancy, with 7.4 made redundant for every 1,000 PMETs in 2012, up from 5.5 per 1,000 in 2011, though this was still below the recessionary high of 15 per 1,000 in 2009. PMETs had higher incidence of redundancy than production & related workers (5.2 per 1,000) and clerical, sales & service workers (3.5 per 1,000). They now form the slight majority (54% or 5,960) of workers laid off in 2012. This possibly reflects the growing vulnerability of mid-level white-collar workers due to globalisation and technological innovations, which had previously impacted mainly blue-collar manufacturing workers.
4. Amid the drive for productivity, restructuring of business processes for greater efficiency (37%) was the top reason for redundancy in 2012, up for the second consecutive year from 34% in 2011 and 23% in 2010. This was followed by poor business or business failure not due to recession (23%), reorganisation of businesses (21%), high operating costs (21%) and labour cost (20%) as well as downturn in the industry (16%).
5. After rising in 2011, the rate of re-entry into employment declined slightly in 2012, but remained above recessionary levels. Slightly over two-thirds (68%) of residents made redundant in the first three quarters of 2012 re-entered employment by December 2012 (i.e. within 12 months of redundancy), down slightly from 70% in 2011, though higher than the recessionary low of 65% in 2009. This partly reflects the increase in layoffs of PMETs, who have below-average re-entry rate (63%), as they face competition from the growing supply of tertiary graduates. Some PMETs could also have savings and prefer to spend more time to look for jobs that match their skill sets, qualifications and salary expectations.
   
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6. The report is available online on the Ministry of Manpower’s Statistics and Publications webpage. It goes beyond the quarterly reporting in the Labour Market Reports to provide additional analysis on the incidence of redundancy, breakdown of workers affected by residential status, reasons for redundancy, profile of establishments with redundancy, time taken to secure re-entry into employment and the shift in industry among those who re-entered employment.

¹ Data pertain to private sector establishments each with at least 25 employees and the public sector.