COS 2021: Re-skilling and the Promise of Re-employment

Assoc Prof Jamus Jerome Lim (Sengkang): Chairman, currently, WSG offers a Professional Conversion Programme, or PCP, that seeks to enable mid-career PMETs to undergo skills conversion into new occupations or sectors; as well as SkillsFuture credits for all Singaporeans to prepare themselves for potential career transitions. SkillsFuture and the PCP received a further boost under the Jobs Growth Incentive announced in August 2020 where the Government committed to co-pay a quarter – half for those aged over 40 – of the salaries.

In a world where changing technology, continued globalisation and environmental considerations mean that job displacement and structural unemployment are liable to become more pervasive, co-funded PCPs of this nature will take on an increasing importance in helping our economy evolve into the competitive landscape of the future.

Yet, while we have some anecdotal evidence of the programmes’ benefits – a resident employer I know shares, for example, of a number of successful placements. We have less systematic evidence that there is proactive re-employment of recentlydisplaced workers. Currently, the JGI is applicable for up to one year for hires commencing in September 2020 onwards. 

This sort of certainty for both employer and employee is critical. From the employer’s perspective, it is effectively co-insurance for a risky hire since the potential employee’s ability to adapt and perform in a new role is largely unknown.

From the employee’s perspective, it is insurance of a different kind. The promise of a job, even if it is only guaranteed for a year, is a solid incentive to be willing to undergo uncertain and often painful re-training.

Given the inherent complementarities between the PCP and JGI, I wonder whether co-funding support can be made more permanent. I would even go as far as to venture that the PCP be had not just with co-funding but to suggest that the programme become a natural extension of a more holistic unemployment insurance programme, which commences from the point of redundancy.

The Workers’ Party had previously suggested the contours of such a redundancy insurance system, which I will not repeat here. However, I am making the case to further incorporate unemployment insurance, given how it is a natural complement to the PCP and JGI programme.

Such an extended programme is not unprecedented elsewhere. Sweden’s Job Security Councils, for instance, receive not just standard unemployment benefits, but also financial compensation to assist in the job transition. The system seeks to provide security for a job, just not necessarily the job that you are originally trained for. Denmark’s Flexisecurity encourages low-cost, flexible hiring and firing, but displaced workers receive unemployment support alongside re-training and re-education programmes. And Germany recently re-fashioned its National Unemployment Agency to become more of a job matching entity that issues not only career advice but also vouchers to finance re-training costs.

The underlying principle behind these efforts is clear. There is a natural end-to-end complementarity between unemployment insurance on one hand, and retraining and reintegration into the workforce on another. Of course, they are perennial concerns that have to do with cost, but redundancy insurance can be made a self-financing system heavily supported by workers’ own contributions and, perhaps, by some Government top-up with a recurring revenue.

Singapore already has most of the elements of an end-to-end job safety net in place, including the functional equivalent of unemployment insurance, which was widely deployed over the course of the COVID-19 crisis via a number of relief schemes and support grants. All that is lacking is a willingness to institutionalise this approach and ensure that the system is cohesive so that Singaporeans unfortunate enough to be displaced from the jobs that they are previously prepared for, also receive the support and guidance they need in a tough labour market. 

Ministry of Manpower
2 March 2021

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