Singapore is facing its worst recession on record, and mature workers need to upskill to remain relevant to the agile workforce 

Six months ago, 65-year-old Helena Wong, a secondary school teacher, was told that her yearly contract would not be renewed after the June school holidays. The news surprised the chemistry teacher who has been an educator for over 30 years. “All my life, I have dedicated to teaching and nurturing students. So, this came as a shock to me as I was at a loss on how to pass my time and earn some income,” she tells The Edge Singapore.

A desire not to stay home, unemployed, pushed Wong to send out applications “aggressively” from March. Her focus was on teaching roles in other secondary schools and private educational institutions such as tuition centres and private schools.

Alas, the Covid-19 pandemic has put a dent in her job search. “Many of the schools I applied to have filled their quota for science teachers. Landing a teaching role in a private institution is much harder now since most lessons are home-based. So, not many teachers will be needed,” she says. “Also, employers seem to prefer younger, less experienced workers who work at lower wages and possess strong digital skills that are so important now.”

Wong is now using her time to brush up on her IT skills, in hopes of scoring a teaching position next year. She is not alone in her job-hunting in this bleak labour market. A former technician from the oil and gas sector who goes by the name Jackson has also had tremendous difficulty finding a job.

The 68-year-old, whose former role was classified as essential, was “dumbfounded” when asked to take no-pay leave indefinitely from April. He believes the government advisories encouraging seniors to stay home — to minimise their risk of infection — pushed his employer to place him on that scheme.

With the offshore and marine sector in a downturn made worse by Covid-19, Jackson is not sure when he can return to work. He has been scouting for “any job paying at least $2,800”, but feels his age puts him at a disadvantage from his peers.

Both Wong and Jackson are part of a sizeable number of mature workers — loosely defined as persons aged 50 and above — who are having difficulty securing full-time, permanent employment. Historically, as at June 2019, economists estimate these individuals account for about 36% of the total resident workforce here.

The Q1 labour market figures released by the Ministry of Manpower (MOM) on June 15 showed an increase in Singapore’s unemployment rate to 2.4% in March, ahead of the 2.3% recorded last December. Specifically, the jobless rate for those aged 50 and above stood at 2.9% in March, down a smidgen from 3.0% in December. Breaking down this data, MOM notes that as at end-March the unemployment rate was 3.1% for those aged 50–59, and 2.6% for persons older than 60.

Another worrying statistic is the current ratio of job vacancies to unemployed persons. The metric has tumbled to an all-time low of 0.71 in March — the latest available data — from 0.84 in December 2019. A number lower than 1 implies that the number of jobs available is insufficient to serve all the unemployed, even if they undergo retraining. In this instance, it means there are only seven placements for every 10 persons unemployed in Singapore.

Market watchers say a greater cause for concern now is the low overall employment rate. Singapore’s total job losses hit 121,800 in June 2020, more than four times the 25,600 registered in March, according to preliminary estimates from MOM. This marks the largest quarterly contraction on record since 2003 when the SARS pandemic hit. In June, seasonally-adjusted unemployment rate edged up to 2.9%, from 2.4% in March. At the nadir of the global financial crisis (GFC) in 2009, peak unemployment was 3.3%. However, the June numbers should be seen in the context of employers not stumping up the full wage bill. As part of the $92.9 billion support package, the government is subsidising up to $3,450 per month for each of the 1.9 million working Singaporeans.

The government wage subsidy runs till August, with the final payment to be disbursed in October. While there is no certainty if this subsidy will be extended, officials say clarity on this will come very soon.

Even so, economists are bracing for higher numbers of job losses. Maybank Kim Eng senior economist Chua Hak Bin estimates total job losses of between 180,000 and 220,000 this year, or some 5%. His earlier estimate was between 100,000 and 150,000, which translates into a 4.5% unemployment rate. In any case, Chua expects mature workers to account for over 40% of local retrenchments in this recession.

Kelvin Seah, a senior lecturer of economics from the National University of Singapore (NUS), shares the same sentiment. He expects mature workers to suffer a higher likelihood of retrenchment. “Many mature workers are receiving relatively high wages because of seniority-based wage systems. These workers are also often perceived to be less productive compared to younger workers,” he says.

“Given applicants with similar skills, employers tend to prefer younger applicants to older ones. This discrimination appears to increase substantially once workers hit their 40s,” he says, noting older workers carry certain stereotypes: they are less able to learn new tasks, less flexible or adaptable, and less ambitious.

A structural problem

A possible reason for mature workers’ challenges in being or remaining employed is misconceptions and ageist perceptions. For instance, only 63% of 1,052 polled in December 2019 here felt that their workplace values employees regardless of age. Administered by recruitment firm Randstad, the same survey showed that on average, an individual’s career stagnates upon turning 48 years old.

There is an urgent need for Singapore to cast aside these perceptions to cope with its ageing population. Life expectancy at birth here has been increasing at a rate of three years every decade. This means that children born today can possibly live up to a century, notes Andrew Scott of the London Business School, co-author of a 2016 self-help book, The 100-Year Life, which attempts to show that there are opportunities and not merely challenges to living this long. According to the authors of the book, there may be something worse than the Hobbesian vision of a life that is “nasty, brutish and short” — one that is nasty, brutish and long.

In the meantime, the demographic tide marches on. The working-age citizen population aged 20 to 64 here is expected to peak this year, and then start to decline. It is projected that one in four Singaporeans will be aged 65 or older in the next 10 years.

An ageing population is not just Singapore’s problem. For instance, Japan’s population of those aged 65 and older already outweighs the number of persons in the 10–25 age bracket. South Korea will likely follow suit between 2021 and 2023, while China will reach this state by 2032, a report by Credit Suisse indicates.

The bottom line is: if no action is taken, the average age of people employed here will keep rising, while the number of workers will fall. In fact, inaction is likely to hurt the level of productivity as well as the economy’s competitiveness, cautions Mayank Parekh, chief executive of the Institute for Human Resource Professionals (IHRP). Such a situation will also impede public finances as government spending on healthcare will have to increase at a time when the taxpayer base is shrinking, he says.

On the other hand, if the elderly workforce can be tapped to remain productive, economic planners will be pleased to know they will be a lift to the overall numbers instead of a drag. A term has even been coined to describe this phenomenon: longevity dividend. Championed by Professor Jay Olshansky from the University of Illinois at Chicago, the term captures the economic and health benefits that societies would reap if the biological process of ageing is slowed such that people enjoy more years of good health. On an individual level, this reflects the mental and physical strength that people may possess even as they age. This way, they will be better engaged and can make significant contributions to the labour market and economy as a whole.

Longer runway

Interestingly, an ageing population does not inevitably cause a macroeconomic decline, reports a 2019 publication by the United Nations focused on ageing. Instead, it says the “opposite” may be observed through well-chosen policies. This includes government support for lifelong education and healthcare, and the promotion of equitable employment among women and older persons, the international body recommends. A gradual increase in the official retirement age and the support of family-friendly initiatives are some examples it details.

Singapore has been moving towards a more inclusive workforce, with schemes supporting flexible working arrangements. For instance, the MOM’s Work-Life Grant provides $2,000 for each local employee placed on flexi-work arrangements such as part-time work or shorter work weeks, for up to 35 workers in each company.

More recently, the city-state is looking to increase its statutory retirement age gradually from 62 to 65 by 2030. In simple terms, this means that in 10 years, an individual cannot be asked to quit his or her job due to age, till he or she reaches 65. The republic is also looking to change its re-employment age — the age limit at which bosses continue to employ eligible staff — from 67 now to 70.

Announced by Prime Minister Lee Hsien Loong in his 2019 National Day Rally speech, these milestone changes are challenging in the current downturn but still critical to protect Singapore’s workforce. In fact, the decision to raise the age ceiling for retirement and re-employment came out of recommendations in a 2019 report by the Tripartite Workgroup on Older workers, which comprised representatives from the government, businesses and labour union. A key consideration was the health-adjusted life expectancy — or Hale — which estimates the number of years a person is expected to live in good health. Singapore’s Hale was 73.6 in 2016 and is projected to reach 76.7 in 2030.

Aside from these schemes, companies can tap on grants for the placement and training of their mature employees. For instance, employers who hire mature job seekers after May 27 under the Professional Conversion Programme (PCP) and place-and-train programme may receive an enhanced hiring incentive as part of the SGUnited Jobs and Skills Package, a Workforce Singapore (WSG) spokesperson tells The Edge Singapore. Under this, companies will receive salary support of 40% for up to six months, capped at $12,000 per mature worker.

Companies have welcomed these introductions, given the longer runway it offers employees. For instance, Workato — an intelligence automation platform — says the support rendered under the PCP helped to lower the costs incurred to train their mature employees on the usage of Salesforce, a popular business software. The company encourages staff “to work as long as they can contribute,” says Khoo Choon Yen, who heads the company’s people operations division. Its oldest employee in its Singapore office is 54 years old. Noting the wealth of industry knowledge and experience such mature workers possess, Khoo believes they offer good mentorship and support to their younger colleagues.

Over at information services firm Percept Solutions, director and country chief officer Satish Kosaraju says the company has also benefitted from hiring mature workers. “We have had good experiences thus far, and they have been able to adapt and improve on the job,” he notes, adding that their oldest employee is hitting 65. The positive experience has seen the company devising a training and development model specific to mature workers that runs for around six to nine months. The only concern when hiring these workers, says Kosaraju, is the flexibility of their thought process. An individual who is flexible can learn better, thereby allowing for their seamless integration into the team, he explains. Conversely, an individual who is resistant to learning, may prove harder to work with.

Once such barriers are overcome, mature workers will be seen to have better emotional control, crisis management and problem-solving capacity. Their brains are also deemed to perform better and quicker than a younger counterpart on matters they are experienced in and have performed repeatedly, says Carol Tan a geriatrician at The Good Life Medical Centre.

Agreeing, IHRP’s Parekh says: “Older workers may be more expensive, but experts say that on average, they outperform younger ones on almost every measure of job performance. They are more conscientious, less absent and have better social skills.”

Hale and healthy

Even though experts try to put a positive spin on the employment of mature workers, the stereotypes against their odds of recruitment in reality, are undeniable. As such, London Business School’s Scott believes people should lead a multi-stage life: Instead of the conventional way of thinking about life in three phases — education up till the early 20s, working life until the 60s and then a long retirement — individuals should be encouraged to reinvest in themselves at different stages, take more sabbaticals and breaks or even opt for more flexible work.

Agreeing, Nitya Rao, a career and executive coach at Global Lumen HR, believes that individuals should invest in neuro-agility. This involves participating in new tasks frequently and upskilling to expose themselves to new skills and schools of thought to remain relevant in the fast-paced job market. “Mature workers must set themselves apart with a keenness to learn and the empathy to nurture their younger peers,” she advises.

In terms of specific skills, Rao suggests technology-based skills relevant in today’s world; and for soft skills, she reckons a strong digital presence and building a network on professional networking sites will aid them in landing a role, especially at this unprecedented time. This may well be the ticket supporting Wong and Jackson in their road to finding a role, and one that they will enjoy doing.