Speech at Singapore Tripartism Forum

Mr Gan Kim Yong, Minister of State for Education and Manpower, NTUC Centre

Mr Bob Tan
Vice President, Singapore National Employers Federation

Mdm Halimah Yacob
Assistant Secretary-General, National Trades Union Congress 

Ladies and Gentlemen

Tripartism – A Uniquely Singapore Advantage

During the inaugural Singapore Tripartism Forum in January this year, Prime Minister Lee Hsien Loong said that a strong tripartite relationship is one of Singapore's most sustainable advantages. The mutual trust that the tripartite partners have developed over the years is something many other countries find hard to replicate.

2.   This strong tripartite partnership among the employers, the unions and workers and the Government, has helped us grow, prosper and move forward together in good times. It has also helped us weather hard times. Indeed, Singapore's strong labour relations ranked 1st in the World Competitiveness Yearbook 2007. This had helped position us as the 2nd most competitive economy globally, behind the US.  However, we must not take our achievement for granted and we must continue to strengthen this partnership.

Tripartite Approach for Older Workers Issue

3.   The tripartite approach and strong tripartite relationship have enabled us to reach national consensus on many major issues. One of them is the challenge of enhancing the employability of older workers.

4.   Since the 1980s, we have recognised the need for workers to work longer and retire later. Our ageing population and declining birth rates will mean that in time to come, fewer younger workers will enter the workforce. We will need to keep workers in the workforce longer to sustain the economic growth. At the same time, we are expected to live longer. Workers must be prepared to work longer so that they can set aside enough savings to support themselves in their old age. Many older workers also want to continue working because they want to remain active and contribute to society.

5.   Enhancing the employability of older workers is therefore a national priority that requires concerted effort by employers, workers and the Government. That is why we have always taken a tripartite approach in addressing this challenge. When we legislated the retirement age at 60 in 1993, there were extensive tripartite discussions and consultations. A Tripartite Committee on the Extension of the Retirement Age was later set up to look at the implications of having a higher retirement age. This led to the raising of the statutory retirement age from 60 to 62 years in 1999, as well as the implementation of other initiatives recommended by the Committee to address issues such as the wage cost of older workers, retrenchment benefits and seniority-based wage structures. To further enhance the employability of older workers, the Tripartite Committee on Employability of Older Workers, which I chair, was set up in 2005. The Committee recently released its Final Report which included recommendations encompassing promotional efforts, incentive schemes and legislative changes.

Good Progress Made

6.   Over the last two years, under the Tripartite Committee of Employability of Older Workers, the National Trades Union Congress (NTUC), Singapore National Employers Federation (SNEF), Ministry of Manpower (MOM) and the Singapore Workforce Development Agency (WDA) have worked closely to implement the Committee's recommendations.

7.   Our collective efforts have made good progress, aided by strong economic growth. The employment rate of those aged 55 to 59 has risen from 46% in 1993 and 52% in 1999, to a record level of nearly 61% in 2006; while for those aged 60 to 64, the employment rate has similarly gone up from 30% in 1993 and 33% in 1999, to almost 42% in 2006.

8.   In particular, I am pleased to note that through tripartite efforts, 411 companies have participated in the ADVANTAGE! Scheme and committed to hire over 3,100 mature workers. These companies have or are working on various initiatives such as job redesign and automation that would help in the recruitment, retention and re-employment of older workers. These companies come from a wide range of industries including Transport, Retail, Education, Healthcare, Finance and Hotels. While the Scheme provides funding support, each tripartite partner plays an important role in reaching out to employers, encouraging them to change their employment practices to be more age-friendly, as well as motivating workers to be ready to take on different job roles and adjust their own expectations.

9.   To correct misperceptions and positively shape mindsets, the tripartite partners have also embarked on broad-based promotional efforts. In May 2006, the Tripartite Alliance for Fair Employment Practices (TAFEP) was established to promote mindset change among employers, employees and the general public to adopt positive approaches and practices that are fair and equitable to all workers. More than 500 companies have signed the pledge to practise fair employment practices.  This is a good start but we need to continue with our efforts.

Next Steps Forward

10.   Building on the momentum of past years, the Tripartite Committee will focus its efforts over the next five years on initiatives to help companies employ more older workers as well as employ them for longer and beyond the retirement age. Some of these measures will be discussed today, such as the enhancements to the ADVANTAGE! Scheme. ADVANTAGE! will provide funding support to companies in their efforts on three broad fronts, specifically (i) recruiting more workers aged 40 and above; (ii) retaining existing workers up to 62; and (iii) facilitating the re-employment of workers beyond age 62. The officers from WDA who are here today will share the details with you later.

11.   The Tripartite Committee has also recommended that the Government introduce legislative changes within five years to facilitate older workers to work beyond age 62. Legislation can be a powerful signal and catalyst to shape behaviour and drive corporate practices. However, as shown by the experience of other countries, it is in itself not a panacea for dealing with the multiple challenges faced by older workers. Indeed, if the ground is not adequately prepared, legislation can have a negative effect. Companies may become hesitant to hire mature workers for fear of having to employ them for extended periods.

12.   Legislation must therefore be complemented by commensurate efforts to help businesses adjust to the new legislation to achieve a higher effective retirement age.  Workers must also be prepared to work longer and retire later. We will need further mindset change from both employers and workers to assimilate the concept of workers working longer and retiring later. The tripartite partners will continue its outreach and promotional efforts to companies to encourage age-friendly workplace practices. We will also have more targeted efforts to reach out to specific groups of workers. I urge all companies to build up capabilities and introduce HR policies and systems to employ more older workers and to help them work longer. Companies can make use of the ADVANTAGE! Scheme to make concrete changes to recruit, retain and re-employ more older workers.

13.   The Tripartite Committee has set a target of raising the employment rate for residents aged between 55 to 64 from the current 53.7% to 65% in the medium term. To achieve this, we need to get an additional 78,000 residents aged 45 to 54 today to join the workforce or to stay in the workforce. This is quite a stretched target, but I believe this target is achievable. The tripartite partners will have to work very hard with employers and workers.

Conclusion

14.   In the final analysis, we must recognise that age should not be a barrier to employment. Equipped with the right skills and expertise, older workers are a valuable source of manpower, especially now when the economy is doing well and workers are in demand. Employers can benefit from having an age-diverse workforce, where mature workers with the requisite experience and skills can contribute positively in their jobs. Workers, on the other hand, must also recognise that they can benefit from working longer as they can then retire more securely.

15.   There is no easy solution to enhancing older workers' employability. It requires a concerted effort from everyone. I am confident that with the strong tripartite spirit and co-operation from all stakeholders, we will be able to enhance the employability of older workers, raise their effective retirement age and improve the employment rate.

16.   Thank you.