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Labour Market in 2Q 2024

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INTRODUCTION

1. As economic growth picks up, the labour market continued to expand in 2Q 2024. Total employment growth more than doubled in 2Q 2024 (11,300) compared to 1Q 2024 (4,700).1 Resident employment rose in the outward-oriented Financial & Insurance Services, Information & Communications and Professional Services sectors, but saw seasonal declines in Retail and Administrative & Support Services. Non-resident employment increased in 2Q 2024 (12,000), driven by the growth of Work Permit Holders in Construction and Manufacturing, mainly in lower-skilled jobs typically filled by non-residents as residents are not keen to work in these jobs. Overall, total employment grew by 16,000 in 1H 2024, with increases in both resident (4,900) and non-resident employment (11,200).

2. Labour demand remained strong with the high number of job vacancies holding stable in 2Q 2024. The labour market remained tight with the number of job vacancies exceeding the number of unemployed persons – the ratio of job vacancies to unemployed persons rose to 1.67 in June 2024. Amidst this tight labour market, unemployment rates improved in June 2024 (overall: 2.0%; resident: 2.7%; citizen: 2.8%) and the resident long-term unemployment rate remained low at 0.8% in June 2024. Retrenchments rose slightly in 2Q 2024 (3,270) from 1Q 2024 (3,030) but remained low overall (1.4 retrenched per 1,000 employees).

MAIN FINDINGS

Total employment continued to grow

3. Total employment grew by 11,300 in 2Q 2024, more than double the increase in 1Q 2024 (4,700). Non-residents (12,000) accounted for all the increase, while resident employment declined marginally by 600.2 In the first half of 2024, total employment grew by 16,000, with both resident and non-resident employment growing by 4,900 and 11,200 respectively.

4. In 2Q 2024, resident employment grew in the outward-oriented sectors such as Financial & Insurance Services, Information & Communications and Professional Services, but saw seasonal declines in Retail Trade and Administrative & Support Services as firms released workers3 who were hired in earlier months, resulting in a marginal decline in resident employment in 2Q 2024.

5. Non-resident employment growth was largely driven by Construction and Manufacturing, sectors which rebounded strongly after declining last quarter. The increase was mostly from Work Permit holders working in sectors and non-PMET roles which residents are not keen to work in.

6. S Pass holders saw negative growth in 2Q 2024, but this was a smaller decline compared to 1Q 2024. The decline was mainly from Manufacturing. This is in line with the various moves implemented in the last two years to uplift the quality of S Pass holders, including increases in S Pass qualifying salaries and levies as well as the reduction in the S Pass quotas in Jan 2023.

7. The number of EP holders declined on the whole, but employment trends differed across sectors. Administrative & Support Services and Wholesale Trade saw the number of EP holders increase, while Information & Communications, Professional Services and Financial & Insurance Services saw declines. These declines followed the post-pandemic surge in hiring.

Unemployment and long-term unemployment rates remained low

8. Unemployment rates have trended lower in June 2024 (overall: 2.0%; resident: 2.7%; citizen: 2.8%) compared to March 2024. The resident long-term unemployment rate in June 2024 remained the same as March 2024 at 0.8%.

The number of retrenchments remained low in 2Q 2024

9. The number of retrenchments remained low in 2Q 2024 but rose slightly from the previous quarter (1Q 2024: 3,030; 2Q 2024: 3,270), with increases in Financial & Insurance Services and Wholesale Trade.4 Across the economy, most firms cited business reorganisation or restructuring in 2Q 2024 as the reason for retrenchment. Retrenchments due to concerns of recession or downturn in the sector have declined, as local external demand outlook is expected to be resilient for the rest of 2024.

More than half of all retrenched residents were able to secure jobs within 6 months post-retrenchment

10. Although more than half of all retrenched residents were able to re-enter employment within 6 months post-retrenchment, the resident rate of re-entry dipped from 59.4% in 1Q 2024 to 55.0% in 2Q 2024. Based on the experiences of past retrenched cohorts, the re-entry rate improves significantly with time. Data on residents who were retrenched in the first two quarters of 2023 showed that more than seven in ten found employment within 12 months post-retrenchment.

The number of job vacancies held steady in June 2024

11. The number of job vacancies in June 2024 (81,200) held steady compared to March 2024 (81,900). With the decline in the number of unemployed persons, the ratio of job vacancies to unemployed persons increased from 1.56 in March 2024 to 1.67 in June 2024.

ASSESSMENT OF THE LABOUR MARKET

12. The labour market has performed well in 1H 2024. Looking forward, MOM expects labour market momentum to be sustained, with wages and employment continuing to grow in tandem with economic growth. In particular, resident employment is expected to be boosted by Financial & Insurance Services, Information & Communications and Professional Services5, as well as the Formula One Singapore Grand Prix and year-end festivities. The overall number of EP and S Pass holders declined in 1H 2024 as firms adjust their workforce post-pandemic and adapt to policy changes to improve the quality of the foreign workforce. With the economy picking up, the number of higher-skilled foreign workers is expected to rebound in the medium-term, if macroeconomic conditions remain positive.

13. In the longer-term, we should expect resident employment growth to moderate given Singapore’s high labour force participation rate and slowing resident workforce growth. To complement our resident workforce growth and continue to create good jobs for Singaporeans, we need to remain open to global talent and attract foreign investments. Foreign-owned firms make up around 20% of firms in Singapore and provide jobs for nearly one-third of employed residents. Foreign-owned firms also account for a disproportionate share of higher-paying jobs – they provide jobs for six in ten residents earning a gross monthly income of above $12,500.6 Foreign-owned firms also create business for our local SMEs who hire the majority of resident workers.

14. The Government has updated our foreign workforce policies to ensure that businesses hire foreign workers of good quality and to attract global talent to Singapore.

i. For example, MOM introduced the Overseas Networks & Expertise (ONE) Pass in January 2023 to attract top-tier global talent that can anchor new business activities and create more opportunities for Singaporeans.

ii. The Complementarity Assessment (COMPASS) framework took effect in September 2023 for new EP applications and in September 2024 for EP renewals. COMPASS is a transparent point-based system providing clarity to businesses seeking to hire skilled foreign professionals and gives more points to businesses that have a strong local core, a diverse foreign workforce, or contribute to our strategic economic priorities.

iii. MOM has gradually increased the EP and S Pass qualifying salaries by benchmarking these qualifying salaries to the top one-third of local Professionals, Managers, Executives and Technicians (PMETs) and Associate Professionals and Technicians (APTs) respectively. This ensures that the quality of foreign workers improves in tandem with resident wages.

iv. To reduce over-reliance on lower-skilled foreign workers and spur businesses to transform and raise productivity, MOM and sector agencies have reduced the Dependency Ratio Ceilings and increased levies in the Construction, Marine and Process sectors.

15. At the same time, the Government will continue to invest heavily in Singaporeans to enable them to compete strongly amidst continuous economic transformation and uncertainties that remain in the global environment.7 Amid business transformation, employers should press on to equip their workers for expanded or redesigned job roles:

i. The Government calls on employers to make full use of available resources and programmes to remain competitive. Workforce Singapore (WSG) has worked with sector agencies to launch 17 Job Transformation Maps (JTMs) which provide actionable insights on the impact of technology and automation on businesses and jobs. The JTMs serve as a useful compass for businesses and workers to prepare themselves for the future of work. Employers can tap on the Support for Job Redesign under Productivity Solutions Grant to redesign jobs and on SkillsFuture training subsidies to equip their workers with the necessary skills for these new jobs.

ii. The Government will empower Singaporeans to take charge of their career health and navigate changes in the economy and jobs. Workers can make use of the CareersFinder feature on Workforce Singapore's (WSG’s) MyCareersFuture job portal, which harnesses data and artificial intelligence to explore career options that make use of their skills and experience, and pathways to reach their career goals. Singaporeans can also tap on career coaching and guidance services provided by WSG and NTUC’s Employment and Employability Institute.

iii. As businesses restructure and jobs requirements shift, we will help jobseekers to reskill for new jobs. The Career Conversion Programmes (CCPs), which support mid-career workers to undergo industry-recognised training, have been enhanced to provide greater salary support. Since 1 April 2024, the salary support caps for CCPs have been increased to $7,500 for mature or long-term unemployed workers and $5,000 for other workers. In addition, the eligibility criteria have been expanded beyond employees in at-risk roles to cover all employees who are being reskilled to take on growth jobs.

iv. For workers who are displaced, we will help them to bounce back. The Taskforce for Responsible Retrenchment and Employment Facilitation reaches out to all affected retrenched workers to offer career matching services. The SkillsFuture Jobseeker Support scheme which will be implemented next year will provide involuntarily unemployed workers with financial support to enable them to focus on their job search and find new jobs that better match their skills and experience.

FOR MORE INFORMATION

16. The “Labour Market Report 2Q 2024” is released by the Manpower Research and Statistics Department, Ministry of Manpower. The report and technical notes on the various indicators are available at https://stats.mom.gov.sg.

FOOTNOTE

  1. Data in this press statement excludes migrant domestic workers.
  2. The numbers do not sum up in some instances are they are rounded to the nearest hundreds for readability.
  3. These workers are mainly temporary help hired for purposes of sales, crowd management, security, and administrative work.
  4. According to MTI, the projected recovery of the Manufacturing sector, particularly that of the electronics cluster, is expected to benefit trade-related services sectors such as the machinery, equipment & supplies segment of the Wholesale Trade sector. Growth in the Finance & Insurance Services sector should also remain robust, as global policy rate cuts continue to be implemented amidst sustained disinflation.
  5. In 2Q 2024, these sectors account for about 20% of the job vacancies.
  6. Refers to the top 10% of the income distribution (i.e. 10th decile). Data was based on firms with at least one employee. Source: Administrative data, compiled by MRSD.
  7. Singapore’s external demand outlook is expected to be resilient for the rest of the year. However, an intensification of geopolitical and trade conflicts could dampen business sentiments and add to production costs, which could weigh on global trade and growth. Disruptions to the global disinflation process could also lead to tighter financial conditions for a longer period of time, and trigger market volatility or latent vulnerabilities in banking and financial systems. Taking into account the performance of the Singapore economy in the first half of 2024, as well as the latest global and domestic economic situations, MTI has narrowed Singapore’s 2024 GDP growth forecast to “2.0% to 3.0%”, from “1.0% to 3.0%”.