Rationale for Support Threshold in Jobs Growth Incentive Scheme

11 Mr Gerald Giam Yean Song asked the Minister for Manpower with regard to the Jobs Growth Incentive scheme (a) how does the Ministry derive the support threshold of 50% for mature local hires aged 40 and above; and (b) whether the Ministry will consider increasing this support threshold to 75% to incentivise more employers to hire mature local workers instead of foreign workers.

The Minister for Manpower (Mrs Josephine Teo): Mr Speaker, Members have filed a number of questions on employment support for different groups of jobseekers. I will respond to these related questions together for a fuller treatment.

The SGUnited Jobs and Skills Package was launched in April 2020 with the goal of curating 100,000 jobs and skills opportunities for Singaporean workers. From April to October, the National Jobs Council or NJC, working in partnership with employers and unions, placed nearly 60,000 jobseekers into various opportunities. As at end-October, there are more than 123,000 jobs and skills opportunities still available.

Assoc Prof Jamus Lim was interested to know about the nature of these opportunities. For the purposes of statistical comparison across countries, the International Labour Organization or ILO defines "standard employment" as work that is full-time, continuous, with a direct relationship between employer and employee. This would exclude employment on fixed term contracts, temporary employment, part-time employment, multi-party employment and gig work; all of which are commonly found in modern job markets. This is why the ILO recognises that non-standard employment can provide meaningful opportunities for workers to enter the labour market or to switch sectors. For the same reason, the NJC does not narrowly focus on opportunities that meet the definition of "standard employment". Instead, the NJC's aim is to open up pathways for jobseekers to make inroads into the workforce despite global weakness in labour demand.

Company-hosted traineeships and attachments as well as curated training courses will help jobseekers who are unable to secure a job acquire industry-relevant skills and exposure. This will improve their employability and position them better for eventual economic recovery.

It is encouraging that amongst the SGUnited Jobs and Skills placements, about half were into long-term jobs. One in three were into short-term jobs of less than 12-month duration. The remaining were for company-hosted traineeships and attachments or course-based training. Of the available SGUnited Jobs and Skills opportunities, nearly six in 10 were for long-term jobs, two in 10 were for short-term jobs, and the remainder for company-hosted traineeships and attachments, or course-based training.

Mr Christopher de Souza and Mr Gerald Giam asked about support for mature workers to find jobs and make career transitions. Jobseekers aged 40 and above are well-represented among those placed into opportunities under the SGUnited Jobs and Skills Package, comprising around 50% of job placements and 35% of traineeships and attachments, and training opportunities.

We have consistently provided more support to help mature workers make career transitions. In the Unity Budget, we introduced the SkillsFuture Mid-Career Support Package for locals in their 40s and 50s, to help them stay employable and enter new jobs or new industries. This provides enhanced support of up to 90% of the cost for employers to reskill mature new employees, as compared to generally up to 70% for other new employees.

The Government provided an additional $500 SkillsFuture Credit for those aged 40 to 60 in 2020 to empower them to refresh their skills and enhance their employability. We also built up a pool of volunteer Career Advisors to provide sector and occupation-specific career advice and outline career options.

Mature individuals have valuable skills and bring with them a wealth of work experience. However, some mature jobseekers may still face difficulties in finding permanent jobs in the current job market.

In September 2020, the Jobs Growth Incentive or JGI was launched to support firms in accelerating the hiring of their local workforce. To encourage employers to consider hiring more mature jobseekers, the Government will underwrite 50% of their salaries, up to the first $5,000, for 12 months. This is double the wage support for younger new local hires.

The Jobs Growth Incentive should be seen in conjunction with other measures in the overall package. For example, an employer that meets the eligibility criteria for the Jobs Growth Incentive and hires a mature local worker via a Professional Conversion Programme will not only receive the 50% JGI, but also additional salary support and course fee subsidies, as well as further salary support under the Jobs Support Scheme if they are eligible. This approach has the advantage of tilting more support towards jobseekers that are harder to be matched to available openings.

Having said that, the JGI scheme is still very new, having only started in September 2020. We are constantly monitoring the situation and will continue to make adjustments as and when necessary. For example, in October last year, we extended the higher tier of JGI support to persons with disabilities as well as ex-offenders. This was in response to points raised by Mayor Denise Phua and Mr Murali Pillai.

Mr de Souza asked about the Jobs Support Scheme for the aviation and tourism-related industries. The Government has put in substantial effort and committed close to $100 billion in support measures to help companies and workers deal with the impact of the COVID-19 pandemic. Our economic measures are estimated to have offset some of the rise in resident unemployment rate by about 1.7 percentage points this year. MOF extended the Jobs Support Scheme to cover wages up to March 2021 for sectors that continue to be impacted by COVID-19, such as the aviation and tourism sectors, and are reviewing if a further extension is needed.

MOT and MTI have also provided targeted support to prepare our businesses and workers to emerge stronger. For the aviation sector, MOT introduced the Enhanced Aviation Support Package to preserve core capabilities and to support our local carriers to regain air connectivity to the world. For the tourism sector, MTI worked with industry stakeholders to pilot MICE events and formulate an Event Industry Resilience Roadmap to provide guidance on safe and gradual resumption of business events. STB also launched a domestic tourism campaign and the SingapoRediscovers Vouchers to drive local tourism and stimulate sectoral activity.

While the aviation and tourism sectors have been adversely affected by the COVID-19 pandemic, its medium to long-term prospects remain positive.

However, unlike in a cyclical downturn, some jobs may not return in their previous forms. Therefore, in addition to the Jobs Support Scheme, we are supporting employers to make use of the downtime to redesign jobs and reskill their employees to take on new job roles. For example, WSG has rolled out the Job Redesign Reskilling Programme and the Digital Marketing Reskilling Programme to retrain and redeploy workers in hotel and tourism companies.

For affected workers who are looking to switch to new careers, we will help them to access jobs and skills opportunities. WSG has set up the SGUnited Jobs and Skills Centres in all HDB towns and deployed Careers Connect On-the-Go to bring career matching and coaching services closer to jobseekers. This is in addition to physical touchpoints such as WSG Careers Connect, NTUC-e2i's career centres and WSG-appointed Career Matching Providers, Ingeus and MAXIMUS. Jobseekers can also use WSG's MyCareersFuture.gov.sg, to search for job opportunities that suit their skills and competencies.

The Jobs Growth Incentive will enable firms that continue to do well in the current climate to bring forward their hiring plans. The Government will press on with our efforts to provide employment facilitation support to different groups of jobseekers in different industries, to help them emerge stronger for eventual economic recovery.

Mr Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song (Aljunied): I thank the Minister for her reply. According to MOM's Third Quarter Labour Market Report, unemployment rate among residents aged between 40 and 59 was higher and rose more steeply compared to all other age groups except those below 30, so I am hopeful that the JGI will help this group.

My questions are: how many individuals aged 40 and above have secured jobs as a result of the JGI since the scheme was introduced in August; what is the Ministry's target figure for the number of secure jobs for mature workers under the JGI; and what will they count as a success for this scheme?

Mrs Josephine Teo: Mr Speaker, the Member has asked for an update of the JGI which I am also keen to provide to Members as soon as the data is available.

Let me explain why it takes a bit of time for us to understand how well the JGI has been taken up by companies.

The objective of the JGI is to encourage firms to bring forward their hiring and to expand the number of locals in their workforce. In order to reduce the administrative burden to these companies, we will look at their CPF data and compute the incentive that they are eligible for so that we can automatically disburse it to them.

For every person that is eligible for JGI support, the administrator will have to look at the CPF submissions of the employer in order to compute the incentive that is being paid out to the company. For every employer that has a local employee, for which he has CPF employer obligations, the employer is actually given two months in order to make the CPF payments. So, for someone who was employed, brought onboard at the start of the programme in September 2020, the employer actually has up till the end of November in order to make those payments. [Please refer to "Clarification by Minister for Manpower", Official Report, 1 February 2021, Vol 95, Issue No 16.]

So, the data is still very new, we have to wait for it to come in, in order to make a proper analysis for it. But I assure the Member that we ourselves are very keen to have a sense of it. And like him, we are particularly interested in who has been on the receiving end of this support as far as the jobseekers are concerned.

I would also want to add one more point. The Member has pointed to the unemployment rate of different age groups. Here, I think I wanted to make a general point to all Members and not to Mr Giam, specifically.

We always have to look at data, especially on labour statistics, in a holistic manner. Looking at unemployment is one important indicator but it is also important to look at employment. In the case of Singapore, what we have found is that by the end of the third quarter, the employment levels have returned almost to pre-COVID-19 levels. The employment levels in September 2020, if we compared it to a year ago, was off by just about 0.4%.

That does not mean that we are not concerned about the unemployment numbers and, of course, of the groups that still face more serious issues when it comes to unemployment.

But we look at it in totality, it does paint a different picture. It does tell us that notwithstanding the difficulties, the jobseekers are still invested in the search. They have not exited from the workforce. And if they had exited from the workforce, we would have a very different problem because over the medium to longer term, we still have to address the challenges of a contracting workforce and we also do want to be able to enable people to stay in the workforce, especially those that are older.

Mr Giam has asked about what would constitute a good target. I would say that at this point in time, we would have to look at the entire pool of jobseekers in totality. Every single one of them is important. Every single one of them that we can get back into our workforce is a family that is more able to make progress. So, whilst being concerned about specific segments of jobseekers, I would say that everyone benefiting from the JGI is still a good thing for us.

The Government has set aside a budget of $1 billion for the JGI and we will look at the take-up rate and make adjustments if it is necessary to do so, as we have done for all schemes in the past.

Mr Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song: Mr Speaker, I thank the Minister for explaining the details of the JGI as well as the importance of looking at not just one category of workers but all the workers. Having said that, I really want to understand whether the JGI has a target that it wants to achieve.

This is related to my Parliamentary Question in which I asked about whether the 75% threshold would be considered because if there is no target that is set, how would the Ministry know whether or not it has achieved what it needs to achieve, and how would it know whether it needs to make adjustments, for example, increasing the salary support threshold?

Mrs Josephine Teo: Mr Speaker, I would be cautious about expecting any one single scheme to deliver on our objectives when it comes to employment. Overall, as a Government, our aim must be to try and expand employment and bring down unemployment.

To do so, many factors will have to be aligned. For example, the overall economic conditions and business confidence must be there. If the overall economic conditions are not favourable and businesses do not have the confidence, then no matter how much we set aside for the JGI, no matter how lofty the goals we set out as targets, it will not produce the intended results.

I should also say that in terms of our ability to create the right economic conditions and to boost business confidence, a lot of it has to do with how we are going to continue managing the public health risk.

So, yesterday, we had a very extensive exchange in Parliament following the Ministerial Statements by my colleagues, Ministers Gan Kim Yong and Lawrence Wong. Everything that we are doing in the Multi-Ministry Task Force to manage the public health risk is to enable the economy to get back to some normalcy, at the same time recognising that things will not be identical to what they were before and the adjustments that businesses are going to have to make.

It is also with that context in mind that when we examine the range of schemes and tools that we have at our disposal, it has to be, in terms of how they complement one another. So, the JGI tries to encourage the employers to expand hiring. But we know that for the positions that require higher skills demands from the jobseekers, we know that JGI alone will not do the trick. Because you can put the incentive in front of the employer, but from the employer's perspective, there is no point in whether it is bearing 25%, 50% or 75% of the wage cost if this person that is brought on board is not able to perform as part of the team and deliver and help the business advance, which is why the JGI has to work in concert with other schemes.

So, it is not a good idea for us to overly depend on any single scheme. It is a more holistic approach that we have to employ in order to ensure that we are able to boost employment and bring down unemployment.

But the commitment is certainly there and we are putting all the effort that can be conceived of, and if there are other interventions that are needed, we will certainly also consider the need and the timeliness to do so.

Mr Speaker: Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim (Sengkang): With your respect, Mr Speaker, the Minister does not appear to have directly answered the question that I had posed, which was about non-standard jobs. Instead, she has answered about the proportion of longer term or permanent jobs versus short-term jobs.

And the reason why I draw this distinction is because while I appreciate that non-standard jobs are still jobs, but for workers, these are quite different things if they were to lose their jobs. Standard jobs provide not just security, they provide pecuniary benefits, such as CPF matches from the employers, as well as non-pecuniary benefits, such as employers-supported healthcare.

So, I am wondering if we can get some additional clarity on the proportion of non-standard jobs that have been generated by the jobs programme.

Mrs Josephine Teo: Mr Speaker, there is no question about it. We certainly would like the jobseekers to be able to get into more permanent positions. We would like them to have acquired new skills. And we would like them to be able to get on to a better career path. But in the current context, I think we have to be quite realistic.

At this point in time, what we have to worry about is skills atrophy. If people, for some reason, are not able to get into a meaningful position, whether it is company hosted traineeships or attachments or whether it is training programmes that are course based, I think the risk to them is not so much that they do not have standard employment now; the risk to them is that they will never have standard employment in future.

So, whilst I appreciate the Member wanting to seek a number for me to respond to, I really question the value of this number. It is not how the NJC looks at it. The NJC looks at all these opportunities as being valuable. Otherwise, we would not be pursuing them at all. So, I hope that the Member can understand that.