SINGAPORE – Companies need to play ball in providing attachments and traineeships to engage workers who had been retrenched amid the Covid-19 outbreak, said Senior Minister Tharman Shanmugaratnam on Thursday (July 23), adding that the Government will be “very generous” in supporting their efforts.
The challenge of keeping Singapore’s unemployment figures down will “grow in the months to come” even as the Republic has kept the jobless rate relatively low so far, he said.
“Companies have to play ball,” he said, adding that the Government will provide “significant help” to firms that will allow them to do so.
“We’re going to be very generous in doing that, and, effectively, the state will pay for a good part of the wages or allowances, of those who have these traineeships and attachments,” he added.
Speaking at DBS Bank’s Asia Insights Conference, he pointed out that permanent jobs will be in short supply so “we have to find ways of giving them attachments and traineeships”.
Mr Tharman chairs the National Jobs Council, which oversees the SGUnited Jobs and Skills Package announced in May to support close to 100,000 job seekers this year by creating new positions, traineeships and skills training places.
The Government will also work with companies to help them bring forward their hiring plans.
Mr Tharman said that companies which are still growing are unsure of when to start hiring, given that the Covid-19 has brought about much uncertainty.
Firms know that they will ultimately need to hire more people to grow their business, and the Government’s role is to “help them to bring forward hiring to today, this year (and) next year”, he added in a dialogue with DBS chief economist Taimur Baig and Professor Raghuram G. Rajan of the University of Chicago.
Prof Rajan is a former chief economist of the International Monetary Fund and a former governor of the Reserve Bank of India.
Mr Tharman, who is also Coordinating Minister for Social Policies, warned of the debilitating effects of unemployment.
The economy will collectively lose skills if more people are unemployed, he said.
“We are not going to be able to get back better… not going to be able to come out of Covid-19 in a better state. So we’ve got to bring forward hiring.”
Prolonged unemployment will also put a strain on the psyche of workers who had been made redundant, he added.
Mr Tharman said: “You don’t just start like a rubber band, where you stretch it and then it snaps right back. You stretch it, and it doesn’t snap back. (It) becomes looser.”
Singapore’s approach to saving jobs first is not unique, he pointed out, saying that several European countries are going the same way.
In the first phase of the crisis, governments have helped firms to “keep workers where they can, even if it’s preserving jobs which may not be relevant two or three years from now”, he said.
This is because states provide support to the unemployed, so it is better to subsidise jobs, he explained.
On the attachments and traineeships that the Government is working aggressively to promote, Mr Tharman said that matching will be done as much as possible to ensure that workers are put into roles where they can use their existing skills.
“So, they keep accumulating skills,” he said, even if workers’ placements “may not be (with) the same type of firm or exactly the same industry, it may be an adjacent industry”.
“Never underestimate the way in which previous skills and old skills are relevant to the future. They’re always relevant,” he added.
And it is always relevant to find a way to help workers accumulate skills for them to “move from a traineeship or an attachment into a new permanent job, brimming with confidence”, he said.
Momentum is being created by industry leaders such as DBS and Google for now, Mr Tharman said.
“One role of governments is to work with industry leaders to bring others along… If we work in concert with industries, small firms and big firms, foreign and local, you’re more likely to get the small firms coming along,” he added.
“It’s also (about) the trust in the system. Because if (companies) know that others are going to play the game, (they are) more willing to play the game.”
Mr Tharman said: “The whole corporate sector is going to have to collaborate with us on this (priority of) keeping people engaged at work, keeping them on a path of accumulating skills.”
The DBS Asia Insights Conference ends on Friday.
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