Ministry of Manpower Committee of Supply 2019 – Cuts by WP MPs and NCMPs

(Delivered on 5 Mar 2019)

Job-Skills Mismatch – Daniel Goh

Chairman, in the last few years we have heard this phrase “jobs-skills mismatch” being used to explain the discrepancies between the share of job seekers and job openings in the labour market. We have also heard this phrase being used to frame retraining and reskilling policies and nudge workers to reskill. As Industry 4.0 looms and new cyber-physical systems threaten to replace workers, the phrase has taken on a greater sense of anxiety.

I am not suggesting that job-skills mismatch does not exist and that the phrase is being misused. My concern is that, without proper study, the concept becomes a presumption rather than fact, an ideology rather than a truth. The consequences will be very negative. Our reskilling programmes will miss their mark. Our workers will waste their time going down blind alleys. Our employers will waste resources seeking unreal matches. The government will not be spending effectively.

There has been one instructive study of jobs-skills mismatch by economists at the Ministry of Trade and Industry last November. The study used data from the MyCareersFuture.sg job search platform and looked at the link between seven types of mismatches and job application outcomes.

Education, salary expectation and experience mismatch do not appear to be significant. This means that our workers are not overeducated, demanding of high pay and lack experience. Rather, generic skills mismatch and non-generic skills mismatch mattered, with the latter mattering three times more. Both combined provided for about 5.8% increase in the probability of an unsuccessful application.

There are a few things that we can learn from the study.

First, employers seem to be more concerned about specific skills than generic skills. This is a concern as employers should not be looking for narrowly specific skills. Our workers are already encouraged to be flexible to reskill.

Second, the MCF platform may be inadvertently promoting non-generic skills mismatches by allowing for fine-grained skills-based job searches.

One interesting finding of the study is that the persistence of workers in applying for jobs and the greater the activity of employers on the MCF platform improve application outcomes. The conclusion may well be that, at this juncture, the government should do less in applying technological solutions, and focus on nudging workers and employers to do more to close the gap between jobs and skills.

Underemployment – Sylvia Lim

Underemployment basically refers to situations where a person is working but below capacity. According to the International Conference of Labour Statisticians, measuring underemployment is necessary for better policy making, as it would improve the analysis of employment problems and contribute towards formulating and evaluating policies to promote full, productive and freely chosen employment. In a 2017 survey on Underemployment by the Ong Teng Cheong Institute, it was found that underemployed persons tend to face many challenges such as low morale, insecurity about their job and income, and difficulties in meeting daily expenses.

While we are responding to job disruption by engaging in economic transformation and re-skilling workers, it would be wishful thinking to expect that displaced workers would find work in new industries in a seamless manner and without any discontinuity in income and benefits. To this end, it would be most useful to know how well the professional conversion programmes such as Adapt and Grow did in terms of matching jobseekers with new jobs of comparable pay, or the extent of the pay cuts taken. Further, I understand that Adapt and Grow consists of two sub-schemes: Place and Train, where an employer has been found for the jobseeker, and Attach and Train, where training is done before an employer is found. For this latter group under Attach and Train, what was the success rate for placements?

It is good to note that MOM is tracking underemployment. Currently, MOM presents underemployment based solely on time i.e. those working part-time when they wished to work additional hours. While this is an internationally-accepted indicator, the International Labour Organisation has, over the years, highlighted the multi-faceted nature of underemployment that cannot be captured by time alone. For instance, in 1998, it passed a resolution stating that that there was a need to revise the existing standards on the measurement of underemployment and to broaden the scope to include also inadequate employment situations. Inadequate employment situations cover all those in employment who want to change their current work situation, for reasons such as inadequate use and mismatch of occupational skills; inadequate income; working excessive hours or in unstable jobs. Broadly speaking, inadequate employment could be skills-related, income-related, or working excessive hours.

To this end, the Ong Teng Cheong Institute survey mentioned earlier recognised that underemployment was too complex to be measured by a single factor alone e.g. time. The survey came up with a matrix of 3 factors to identify a group of persons who were considered “severely underemployed” viz. university graduates working full-time who were earning less than $2,000 per month. The OTC Institute suggested that it would be reasonable for the government to target policies towards groups of severely underemployed persons. In view of all these, can MOM update the House on its tracking of, and policy towards, underemployment?

Jobs for Singaporeans – Pritam Singh

Chairman, according to the third report of the Estimates Committee of Parliament released in October last year, 18 out of the 23 industries under the Industry Transformation Roadmaps would see manpower growth up to 2030 while the remainder are not envisaged to experience any manpower growth up to 2030 – these include food services, retail, and real estate amongst others, while others sectors such as construction do not have any manpower targets as their manpower needs are seasonal and based on cyclical factors.

At a recent pre-budget dialogue with the Institute of Chartered Accountants, some panelists stated they only had a vague idea of how SMEs stand to benefit from the Industry Transformation Roadmaps. Apart from the Special Employment Credit, going forward, what are the Government’s plans to prompt, support and encourage Singapore companies to accelerate the transformation of their  business and HR processes  to hire Singaporeans above the age of 65, provide higher salaries to attract Singaporeans employees, or successfully hire women, men or older workers who prefer part-time work as a result of needing time to look after children or dependents. How do the ITMs support these objectives and can they play a more facilitative role in this regard than is currently the case, particularly for smaller SMEs that may find it more challenging to take advantage of the ITM format to fulfil larger national objectives of creating a strong and united Singapore.

CPF for Self-Employed Persons – Chen Show Mao

Sir, self-employed persons account for around one in ten of working residents and, with the rise of the gig economy, may well increase significantly in the future.

The Ministry has indicated it is working on implementing the tripartite working group’s recommendation of a contribute-as-you-earn model for Medisave, whereby contribution to the self-employed worker’s Medisave account of CPF is made as and when a service fee is earned.  I compliment the Ministry on its efforts. Could the Ministry also look into more ways to encourage gig workers to make further voluntary contributions to other accounts of their CPF by providing them with strong incentives to do so?

There is substantial evidence from public policy efforts that positive actions can be induced through non-compulsory incentive mechanisms. For instance, could a “default” be established where CPF deductions (beyond Medisave) initially match those of regular-economy workers with the same job profile, but being nonbinding, would permit opting into a lower amount? Alternatively, could gig workers receive information in their CPF statements about typical contributions by regular-economy workers in comparable employment circumstances, to encourage them to follow the “social norm”?

Self-employed persons typically face short-term cash flow needs, which may trump their longer-term economic interest in saving for future retirement. Could the Ministry look into offering incentives for self-employed persons who voluntarily contribute to their Ordinary, Special or Retirement accounts of CPF, including favorable tax treatment when they do so?

Remove Retirement Age – Daniel Goh

Chairman, life expectancy has risen from 76 years in 1995 to 83 years in 2017. If the retirement age remains stuck at 62 years, Singaporeans who wish to continue working will be forced into early retirement for over two decades.

Would the government consider removing the artificial expiry dates for productive senior workers, namely the current retirement and reemployment ages of 62 and 67 years? Removing the retirement age not only removes the first expiry date, but also changes the current notion about the expiry of work abilities as fixed by age. It will change the ageist mindset.

The reemployment age should be redefined so that it is not referring to another expiry date, but to a transition at 70 years old. This transition obliges employers to put our senior workers on rolling contracts on the same terms that should go on without an expiry date, as long as the workers are still able and productive and want to work.

It is a transition that allows employer and employee to evaluate performance and productive levels together, work out flexi-work contracts if the employee so wishes, and collaborate on job and workplace redesign to keep up productivity.

Triple-Weak Companies – Pritam Singh

Sir, according to the MOM, triple-weak companies are those that do not meet the minimum criteria in terms of nurturing and having a Singaporean core in their workforce, and have a tangential relevance to Singapore’s economy and society. The prospects of Singaporeans been hired into such companies and doing well or getting promoted are low. In September last year, the Minister of Manpower confirmed that the Ministry was monitoring 250 companies labelled as “triple-weak” up from the 100 in February. Out of the original 100 companies, about 20 were removed the watchlist as their HR practices had been raised to industry standards.

Does the Minister have an update on MOM’s investigations into the remaining companies? Separately, has there been a reduction in the prevalence of such triple weak companies? What is the current number of companies that are under investigation and which industries do such companies predominate in? How does the Ministry identify such companies and is there scope for greater enforcement, including whistle-blowing channels to identify such companies early? What action does the MOM take for companies that are uncooperative, show no improvement in their policies, or slide back to their old ways of being “triple-weak”. Finally, are the directors of such companies also barred from setting up new companies and the status of their directorships in other companies reviewed?

Minister mentioned at the last Committee of Supply that some employers have the pre-conceived idea that local PMETs are either unable or unwilling to work, so such companies write off Singaporeans without even considering them fairly. Can I enquire what specific action TAFEP or the Ministry takes to deal with and how does it educate such employers?

Employment Pass Regime – Leon Perera

Sir, in applying for EPs, employers submit educational certificates for employees they want to hire. However for educational certificates other than from India and China, where additional information is needed, not all employers perform independent verification with universities.

The case of Mikhy Farrera-Brochez, who forged his educational certificates, dramatically illustrated the limitations to this approach.

I would like to ask if MOM currently performs some degree of checks, be it in-house or external, on educational certificates submitted for EP applications, such as using a risk-based sample check approach.

As MOM has practical limitations on its ability to verify all certificates submitted, I would like to suggest that MOM could advise employers to conduct the verification via a panel of low-cost service providers. Verification need not be made a compulsory condition of granting the EP. But there is every reason to believe that voluntary use of such a verification process would be high, should it be cheap and accessible. After all, few employers would want to hire an employee who falsifies credentials. Through this, we could cut down cases of such credentials forgery.

Next, what are the current enforcement mechanisms against kick-back or false salary declaration schemes whereby foreigners on EPs are paid below the salary floor or pay a portion of their salaries back to the employer in some way? It is stated in press advisories that “MOM conducts proactive checks to detect and enforce against false applications.” However, this is a crime with “a willing buyer and seller”, as both parties are incentivised to collude and conceal the facts.

Right now, there is an MOM hotline for people to report infringements. How many have used the hotline and how many successful prosecutions have resulted? If effective, can we consider investing in greater publicity for this hotline.

And are there are other means of proactive enforcement used? For example, can more be done with AI and data analytics to flag out suspicious activity for enforcement?