Statement on Labour Market Developments in 1H 2022

Introduction

1. The labour market continued to recover in 2Q 2022, with total employment reaching 99.5% of the pre-pandemic level in December 2019. Resident employment continued to rise, and was 4.2% above the pre-pandemic level in June 2022. Non-resident employment increased significantly following the relaxation of border restrictions in April 2022, but remained 10% below the pre-pandemic level. Unemployment rates remained low (overall: 2.1%, resident: 2.9%, citizen: 3.0%) and the resident long-term unemployment rate improved to 0.7%, comparable to the pre-pandemic average. Retrenchments also fell to a record low (990). As firms filled more positions, the number of job vacancies eased slightly (126,100).

Review of the Labour Market in 1H 2022¹

2. Total employment (excluding Migrant Domestic Workers) continued to expand in the first half of 2022 (108,500) and recovered to around pre-pandemic level by June 2022 (99.5% of the level in December 2019). The increase was mainly contributed by non-residents (95,400), particularly in Construction and Manufacturing, as employers backfilled positions following the significant relaxation of border controls in April 2022. Non-resident employment rose across all pass types, with the bulk coming from Work Permit & Other Work Passes (Work Permit & Other Work Passes: 80,900; S Pass: 7,400; and EP: 7,100).

3. At the same time, resident employment grew steadily in the first half of the year (13,100), with the largest increases recorded in growth sectors such as Financial & Insurance Services, Information & Communications and Professional Services.

4. Unemployment rates held steady at pre-pandemic levels in July 2022 (overall: 2.1%, resident: 2.9%, citizen: 3.0%). The resident long-term unemployment rate declined for the third consecutive quarter, returning to the pre-pandemic average of 0.7% in June 2022.

5. Retrenchments continued to decline to a record low (from 1,320 in 1Q 2022 to 990 in 2Q 2022) and the incidence of retrenchment similarly improved (from 0.6 to 0.5 per 1,000 employees). Among retrenched residents, the percentage who re-entered employment within 6 months post retrenchment fell from last quarter’s high (from 72% to 66%), but remained higher than the same period a year ago (64%).

6. The number of employees placed on short work-week or temporary layoff declined from 670 in 1Q 2022 to 590 in 2Q 2022. Majority of these employees were placed on short work-week arrangements (570), with few laid off temporarily (20).

7. The number of job vacancies dipped slightly to 126,100 in June 2022, after seven quarters of increases, but remained at historical high levels. As unemployment rates declined further, the ratio of job vacancies to unemployed persons edged up slightly from 2.42 in March 2022 to 2.53 in June 2022.

8. The recruitment rate rose over the quarter (from 2.5% to 2.6%) to a rate last seen in 2014. On the other hand, the resignation rate remained stable at 1.7% for the fourth consecutive quarter. Over the quarter, Accommodation and Air Transport & Supporting Services saw the largest increase in recruitment rates. Other consumer-facing and tourism-related sectors also saw recruitment rate rise, as employers ramped up hiring to meet increased demand arising from the rollout of the Vaccinated Travel Framework.

Labour Market Outlook

9. With the significant easing of Singapore’s COVID-19 restrictions, business activities in sectors which had been badly affected by the pandemic are recovering. We expect non-resident employment to continue growing at a robust pace as it catches up to its pre-pandemic level, which will ease labour market tightness. Resident employment, which is 4.2% above 2019 levels, will likely see subdued growth given the low resident unemployment rate.

10. However, the external demand outlook has weakened given the global economic slowdown. Global headwinds such as the Russia-Ukraine conflict, inflationary pressures, geopolitical tensions in the region, and the trajectory of the COVID-19 pandemic may weigh on labour demand going forward. As such, the labour market outlook is uneven across sectors.

11. Tourism- and aviation-related sectors are expected to continue to benefit from the strong recovery in air passengers and international visitor arrivals. Demand in consumer-facing sectors such as Food & Beverage Services should remain robust with the easing of domestic and border restrictions. On the other hand, growth in outward-oriented sectors like Finance & Insurance Services is expected to slow amid global economic headwinds.

Conclusion

12. The labour market continued to make significant improvements in 2Q 2022 as Singapore recovers from the effects of the COVID-19 pandemic. However, there is heightened economic uncertainty ahead. To ensure that businesses grow sustainably and remain resilient, MOM encourages businesses to press on with transformation, increase labour productivity and diversify their non-resident workforce. Businesses should also strengthen their Singaporean core through reskilling and offering flexible work arrangements to tap on more workforce segments such as older workers and caregivers. Businesses can make use of the following Government programmes:

a. The Jobs Growth Incentive (JGI) provides salary support for eligible employers to hire mature, long-term unemployed locals, persons with disabilities, and ex-offenders. The JGI supported the hiring of close to 709,000 locals by 83,000 firms between September 2020 and February 2022. The JGI has been extended for another six months, from October 2022 to March 2023, with reduced support levels in line with the improved labour market conditions. For each new eligible hire in this period, qualifying firms will receive up to 20% of the first $6000 of the worker’s gross monthly salary for six months.
b. The SGUnited Mid-Career Pathways Programme offers attachment opportunities for mid-career jobseekers, where trainees receive up to $3,800 in monthly training allowances. This allows employers to better assess the job-fit of mature jobseekers, while providing the latter with training and industry experience.
c. Employers can tap on the Support for Job Redesign under Productivity Solutions Grant to improve job quality and job attractiveness to workers. Workforce Singapore also offers Job Redesign Reskilling Programmes to support employers in upskilling existing employees to take on enhanced job roles.

For More Information

13. The “Labour Market Report, Second Quarter 2022” is released by the Manpower Research and Statistics Department, Ministry of Manpower. The report and technical notes on the various indicators are available at http://stats.mom.gov.sg/Pages/Home.