The unemployment rate falls across the board in 2021

The local labour is set on a positive trajectory this year, said the Ministry of Manpower (MOM) on Jan 28. Q4’s total employment, excluding migrant domestic workers, rebounded by 47,400, reflecting seasonal hiring due to the year-end peak period in F&B and retail sectors. Resumption of entry approvals for fully vaccinated workers in construction, marine shipyard, and process sectors from early November also helped to boost the numbers of non-resident workers. Total employment is expected to see a rebound of 40,800 last year compared to the contraction of 166,600 in 2020. The annual unemployment rate showed significant improvement compared to 2020, falling from 3 percent to 2.6 percent; the resident unemployment rate falling from 4.1 percent to 3.5 percent, and the citizen unemployment rate dropping from 4.2 percent to 3.7 percent. Retrenchments also fell to 1300 in Q4, with year-on-year retrenchment figures declining significantly from 26,110 in 2020 to 7,820 in 2021.

3.8% salary hike in 2022 for Singapore workers

Source: Straits Times

According to Straits Times, companies are expected to pay their workers more with a talent crunch and inflation looming as the economic outlook improves. A survey that polled 456 firms last year found that employers are offering average pay increases of 3.8 percent this year up from 3.4 percent in 2021. Singaporean workers are ranked among the best paid in total compensation, ahead of countries like Japan and South Korea and behind Australia. 30 percent of employers in the region are raising payroll budgets due to the tight labour markets,23 percent are doing so with the improved business outlooks while 19 percent are responding to inflation.

Source: Straits Times

As mentioned in our article last week on the top 3 criteria that employees look for in a job in 2022, a pay increase is cited by 54 percent of Singapore workers followed closely by a better work-life balance (42 percent) and flexible work arrangements(39 percent). The talent shortage is expected to hit smaller businesses the most as Singapore workers start applying for better-paid positions elsewhere, especially for high-tech sectors (see table above). Also mentioned in one of our January articles about rising business costs, the salary increments, higher costs to replace workers, loss of productivity due to turnover along the impending GST hike all contributes to increased business costs. Therefore, employers should look towards digitalisation, increasing productivity, and keeping business costs sustainable to stay afloat.

What are your views about the fall in unemployment numbers and the rise in salary increment for 2022? Are you also looking for a career change this year?