Job-skills mismatch remains a challenge despite improvements in numbers
The Ministry of Manpower has released its labour market report for the third quarter and the numbers point to an improvement, however slight, especially for local workers.
For citizens, unemployment rate declined slightly to 3.2% from June’s 3.3%. It was unchanged for all workers at 2.2% and also for residents at 3.1%.
Decline in total employment has been easing since the start of the year, contracting only by 4,100 as compared to the first quarter’s 9,400 and the second quarter’s 7,900. This however excluded foreign domestic workers. This was due mainly to the decrease in Work Permit Holders in Marine and Construction.
Meanwhile, employment growth occurred mainly in sectors such as Community, Social & Personal Services, Accommodation, Financial Services and Professional Services.
Retrenchments declined quarter on quarter, from 3,640 to 3,4003. This was also lower than it was in the third quarter last year; the nine-month numbers (11,040) are also lower than 2016’s (13,730).
Mayank Parekh, CEO of the Institute for Human Resource Professionals, said that while it is encouraging to see the labour market improving, it is too early to say what the impact will be on long-term unemployment rates as companies are still cautious when it comes to hiring.
“Increasingly short-term contracts and on-demand workforce is changing the nature of job market. Digital transformation and increasing use of technology is impacting skillsets,” he said.
“Companies will be looking to their HR departments to navigate through these challenges. In this environment, companies are looking for candidates that fit well in the work culture, are flexible, adaptable and possess a great learning attitude. Job seekers should be open to try new work models and take advantage of various job matching schemes that are available.”
The six-month re-entry rate into employment of retrenched residents rose slightly to 66% in 3Q 2017, the highest level since 4Q 2015 (70%). Workers below 30 (82%) and Production & Transport Operations, Cleaners & Labourers (75%) had the highest rates of re-entry.
The ratio of job vacancies to unemployed also improved to 0.87, continuing an uptrend seen since December last year (0.77.)
The Ministry estimates that for the full year 2017, local employment will grow more than 2016’s 11,200 even as total employment could contract due to declines in Marine and Construction.
Local employment is expected to still grow next year, though uneven across sectors. The Ministry of Trade and Industry forecasts 2018 GDP growth between 1.5% and 3.5%.
Given all these, the MOM said, job-skills mismatch will continue to be a growing challenge due to on-going economic restructuring and shifts in composition of the resident labour force.