For the 1st quarter of 2016, Ministry of Manpower (MOM) revealed a record number of retrenchments since 2009. A total 4090 workers were retrenched as Singapore economy slows down and undergo major restructuring. Is your company downsizing and are you on the retrenchment hit list? If not, have you started to future-proof your career?
For many years, Singapore refused to develop policies to ensure safety nets for the unemployed. The fear is that in creating such a social safety net, there will be moral hazards as those who lose their jobs may not be motivated to re-enter the labour market again. This is happening in today’s Europe whereby the unemployment benefits are so generous that the workers would rather remain unemployed in order to enjoy the benefits.
However, the labour landscape in Singapore has changed drastically over the last few years. There are acute shortage of talents in certain job segments like cyber security and digital marketing. While on the other hand, white-collar professionals working in sectors like banking and finance are unable to find work for months and years after being let go by their employers. This phenomenon is known as structural unemployment.
The rising costs of doing business have also put off many companies. Sun-set industries like the electronics and shipping have already seen many companies shifting bases to other countries with lower costs. While the government may be trying their best to mitigate the situation, one should evaluate whether his skill-sets and knowledge are still relevant in this new economy.
If you are not careful, structural unemployment can happen to you. Most people only start to upskill themselves after losing their jobs. Most common reasons are the lack of time due to work and family commitments. Indeed, climbing up the corporate ladder and putting food on the table are important. But one cannot afford to ignore the perils of falling from the corporate ladder. The way down can be fatal if you are not financially prepared. And Singapore is a very unforgiving society. The mentality here is basically either “every man for himself” or “nobody owes you a living”.
When you have no job, you don’t just lose an income. You also lose your social status, identity and self-worth. You may think this is melodramatic but just think about this. We spend at least eight hours daily in our work and our career lifespan is at least 30 to 40 years. So obviously, we spend a large portion of our lives at the work-place and thus, associate our identities with the work that we do. The sudden loss of job, if not handled appropriately, can therefore affect our ego, confidence and our outlooks in life.
If you lose your job, will your family be impacted? How would your friends view you? Are you confident of finding similar job as soon as possible? Do you have sufficient emergency funds to cover your daily expenses? If you have no answers for these issues, then you need to start to future-proof your career.
It takes time and experiences to build a second career. Unless you are an entrepreneur or work in the civil service, you need to start preparing for the prospect of being let go by your bosses at any point of time. I have read so many sad online stories of Singaporeans losing their jobs unexpectedly and unable to find employment for long period of time. Such a trend is worrying because many of them are older workers and their chances of finding suitable jobs are hampered by the competition from foreign workers. These older workers face a bigger challenge because employers would prefer younger and cheaper employees. Thus, many of them feel bitter and angry.
Perhaps, it is time that our government rethink the idea of unemployment insurance to create a safety net for those unemployed. To avoid suffering the fate of the Western countries, maybe the government can adjust the level of benefits such that insured will still actively look for suitable jobs without having their personal finances damaged by the lack of income. This will definitely help to alleviate the stress of no money.
An unemployment insurance policy cannot be considered a form of social welfare scheme as employees will be paying premiums for insuring against retrenchments. By paying a small amount of money, one can protect their income ability for a limited period of time and reduce the amount of hardship for the family. This proposal will also be in line with the government’s mantra of self-reliant.
Secondly, the government should consider creating more flexibility in the uses of CPF schemes to mitigate the impact of retrenchments. Even though CPF is primarily meant for retirement funds, in today’s context, it should be revamped to protect employee against unforeseen loss of income. The CPF Act should be amended to allow employees suffering from retrenchments to draw from their CPF savings for a period of time until they secured a job.
Whilst there are no clear-cut solutions when it comes to solving structural or cyclical unemployment, we should not avoid re-thinking the proposal of a social safety net for the chronic unemployed. Beyond just encouraging fellow Singaporeans to upskill their competencies and saving for the rainy days, there should be more innovative approaches to address this social issue. Having policy for unemployment insurance and expanding the uses of CPF should not be seen as acts of social welfare. In fact, such ideas empower Singaporeans to future-proof their careers without fearing “money no enough”.
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SG Wealth Builder