MOM: Smaller firms showing ‘vitality’ after wage boost

The signs of hiring recovery are ‘very encouraging’

MOM: Smaller firms showing ‘vitality’ after wage boost

Singapore’s wage subsidy scheme has paved the way for businesses to hire 130,000 local workers in a span of three months. Many of the recruits had long been out of work, but the programme now offers hope for Singaporeans coming from diverse backgrounds who aim to re-enter the labour force.

In its most recent jobs report, the Ministry of Manpower said 27,000 firms hired an average of two locals from September to November 2020 with help from the government’s Jobs Growth Incentive (JGI) programme. The average number of local hires in 2020 was twice as high as the average of the same period in 2019, long before the pandemic subsidy came into existence.

Read more: MOM reveals higher salary requirements for foreign hires

The JGI was launched in August 2020 as a stop-gap measure against the impact of COVID-19 on the local talent market, and has been instrumental in getting Singaporeans and permanent residents on the payroll. Wage support of up to $15,000 per employee, for an entire year of service, is given to businesses that prioritise the hiring of locals. Because of the scheme’s initial success, it was extended to September and allocated $5.2bn in this year’s budget.

According to figures from the MOM, about 60% of businesses employed at least one local worker but the rest enlisted higher numbers. The hiring spree was a boost not only for workers who were displaced during the COVID-19 crisis but also for those who had been out of a job for a while. Half of the newly recruited talent, for example, were unemployed at the time of hiring, while more than a quarter had been jobless for more than six months.

Read more: These workers were worst hit by the COVID-19 crisis

The ministry also noted that the local talent pool was diverse. It included older workers, persons with disabilities, and ex-offenders who were attempting to join the labour force but who were often marginalised in the job market. This renewed interest in local talent, especially among small and midsize enterprises, has been very encouraging, according to Manpower Minister Josephine Teo.

“It shows that SMEs have quite a lot of vitality and some of them are growing. It also shows that the JGI is providing them with a certain support and encouragement to expand their hiring,” Teo said.

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