News & Updates

Response by the Singapore National Employers Federation on the Ministry of Manpower’s Committee of Suppy Debate 2024

4 March 2024

The Singapore National Employers Federation (SNEF) welcomes the support provided in achieving productivity-driven growth and spurring business transformation. SNEF supports the steps taken to maximise the productive longevity of our workforce such as by building their career health, and policy changes made to improve long-term business growth through enhancements made to Career Conversion Programmes (CCPs), local and foreign workforce policies.

Enhancement of CCPs
2         SNEF, as one of the programme partners that administers the CCPs, welcomes the CCP enhancements announced, especially as job disruptions become a norm.

3         The higher salary support cap is a win-win for both employers and employees. It reduces the financial risk for employers who are hiring and training untrained employees in new job roles. Employees too gain greater certainty of possible higher salaries as they reskill in their new jobs. The higher salary support will particularly allow our SMEs, which hire 71% of our workforce, to attract talent who will value-add to their business output.

4         SNEF welcomes the broadening of CCP reskilling support to cover all existing employees taking up growth jobs, beyond those in at-risk or vulnerable jobs. This recognises the importance of pivoting existing employees into new growth areas that will also meet business needs. Mr Joe Ow Hon Kit, Chief Executive Officer of SISTIC, agrees and said, “CCP has been instrumental in reskilling SISTIC’s experienced employees, equipping them to seamlessly transit into new roles that are aligned with our evolving business needs, and upskilling these individuals for growth.”

Expansion of Structured Career Planning (SCP) Workshops
5          Additionally, the SCP workshops will enable employers and HR to proactively engage employees on their career health. SCP also helps employers align employees’ skills with business needs and evolving job demands.

6         Currently, SNEF offers complimentary SCP workshops for applicants of the Part-Time Re-employment Grant (PTRG)1. These workshops are based on the SCP Guidebook developed by SNEF and Ministry of Manpower (MOM)2. Moving forward, employers will be able to enjoy industry-tailored SCP workshops developed by SNEF. These workshops will take into account the sector-specific requirements, such as skills requirements of growth jobs as identified under the respective sector’s Jobs Transformation Map. SCP also ensures that employees’ career development plans align with the company’s growth. SNEF would like to encourage employers to implement SCP for all employees, besides those embarking on CCPs, to enhance the career health of their workforce and calls on MOM to support employers’ efforts in doing so.

Raising of Retirement and Re-employment Ages
7.        SNEF, a member of the Tripartite Workgroup on Older Workers, supports the phased-in increase of the Retirement Age (RA) and Re-Employment Age (REA) to 64 and 69, respectively, in 2026. The gradual increment of RA and REA will allow employers to make adjustments to their manpower and upskilling plans ahead of implementation and support senior workers who are able and wish to continue working. Employers are also able to harness the skills and experience of senior workers amidst a tight labour market. SNEF also remains committed to working closely with our tripartite partners on raising the RA and REA to 65 and 70, respectively, by 2030.

8         While the Senior Employment Credit (SEC) scheme helps employers with offsetting part of the wages for Singaporean workers aged 60 and above and earning up to $4,000 per month, the scheme is only available till 2025. Thus, SNEF calls for an extension of the SEC beyond 2025 and to raise the salary cap above $4,000 to help employers adjust to the higher RA and REA.

9         To develop age-friendly workplaces, SNEF is currently supporting employers in redesigning jobs and roles through the Job Redesign under Productivity Solutions Grant (PSG-JR).

Updates on Foreign Workforce Policies
10        SNEF appreciates MOM announcing the increase in Employment Pass (EP) qualifying monthly salary almost a year ahead of implementation. This gives businesses a longer adjustment lead time, amid rising business costs and a tight labour market. While we recognise that tweaks can be expected in the work pass criteria from time to time to prevent overreliance on a foreign workforce, this should be complemented by initiatives that promote skills transfer from the foreign workforce to develop the Singaporean core, particularly in emerging growth areas such as Artificial Intelligence and the green economy.

11        The reduction of the marine shipyard sector’s Dependency Ratio Ceiling (DRC) and increase in its foreign worker levy will heighten the sector’s existing manpower crunch and rising business costs. SNEF appreciates the introduction of the $100 million Marine and Offshore Engineering Support Package announced during the Ministry of Trade and Industry’s 2024 Committee of Supply debate to spur sectoral transformation over the next five years. We also urge employers in the sector to press on with business transformation efforts to seize new growth opportunities.

12         With effect from 1 Jul 2024, MOM will raise the Local Qualifying Salary (LQS) to a monthly gross salary of $1,600, with a corresponding increase in the gross hourly rate for part-time local workers (those who work less than 35 hours per week) to $10.50. With the increase of LQS part-time wage requirements, some existing Progressive Wage Model (PWM) part-time wage requirements may fall below the revised LQS requirement for part-time employees. This will be transitional, with the PWM wage requirements ultimately exceeding the revised LQS part-time requirements after the annual PWM wage refresh and its corresponding increase in hourly wage requirements.

13          In consultation with the tripartite partners, SNEF would like to clarify that employers will only be required to meet the prescribed PWM/Occupational Progressive Wages (OPW) for workers in the respective PWM sectors and OPW occupations to continue to access foreign manpower, even if they are lower than the revised LQS in the interim. In addition, with effect from 1 July 2024, a local full-time employee is counted as:
• One headcount if the employee earns at least a monthly gross salary of $1,600, without OT.
•Half a headcount if the employee earns a monthly gross salary of at least $800 and below $1,600.
•Zero headcount if the employee earns a monthly gross salary of less than $800.

Release of Tripartite Guidelines on Flexible Work Arrangement Requests (TG-FWAR)
14         SNEF is currently working with Tripartite Partners to develop the Tripartite Guidelines on Flexible Work Arrangement Requests (TG-FWAR). TG-FWAR will allow employers to strengthen their employee value proposition and improve talent attraction and retention. The TG is an important tool for employers to mitigate the manpower crunch felt by many sectors in Singapore through a more inclusive workforce, including caregivers, women and senior workers. Such employee groups can benefit from job redesign and various types of FWAs which include flexi-place, flexi-time, flexi-load in managing their work-life needs better. FWAs are a more sustainable way in meeting their responsibilities than introducing additional leave benefits.

Conclusion
15        Employers have an important role to play in achieving sustained productivity growth. To do so, employers must keep up with the pace of change, attract talent and encourage their workforce to renew skills for growth. This will ensure that Singapore continues deepening its business competitiveness regionally and internationally.

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1 SNEF is the sole appointed Programme Partner of the PTRG, which aims to support employers in offering more flexible work options to attract and retain senior employees, allowing companies to better address labour needs in an ageing workforce. The total grant funds up to $125,000 or a maximum of 50 senior workers.
2 https://snef.org.sg/clia_resources/Structured%20Career%20Planning%20Guidebook_SNEF-MOM.pdf