2024 could be a tough year for workers.

Retrenchment expected to increase, workers feeling anxious

Retrenchment numbers, as seen from 2023 and projected into 2024, appear to be increasing, according to the Secretary General of the National Trades Union Congress (NTUC), Ng Chee Meng, at a press conference on Feb. 6.

"We are already starting to see signs, particularly with retrenchment figures doubling and wage growth stagnating or even declining. Many workers have shared with us their worries about losing their jobs and the rising cost of living," he added.

On Jan. 31, 2024, the Ministry of Manpower released advance estimates which showed that the number of retrenchments in 2023 was 14,320, more than twice 2022's "record low" of 6,440.

MOM added that business reorganisation and restructuring remained the top reason for retrenchments in 2023, due in part to the impact of global economic headwinds on outward-oriented sectors such as wholesale trade, IT services and electronics manufacturing.

In addition, job insecurity among workers has intensified, with nearly 40 per cent of the 2,000 Singaporean respondents to NTUC's annual 2024 Survey on Economic Sentiments feeling they were likely to lose their jobs in the next three months.

In comparison, only 25 per cent of the respondents had voiced the same sentiment in NTUC's 2023 survey.

E-commerce firms have also grown too quickly

The President of the Singapore National Employers Federation (SNEF), Robert Yap, added that in the case of high-growth firms and industries, some redundancy will inevitably be created.

In such cases, once the growth drops below the company's anticipated pace, the company's performance will also drop, thereby affecting more staff.

He cited e-commerce companies as an example of companies that have been "growing too fast", with Ng specifically bringing up the case of Lazada as a firm that needs to undergo some "transformation".

On Jan. 3, 2024, Lazada laid off some of its staff from its Singapore office.

A spokesperson for Lazada said the firm was making "proactive adjustments to transform our workforce, to better position ourselves for a more agile, streamlined way of working to meet future business needs."

The spokesperson added that the retrenchment was necessary to reassess its workforce requirements and operational structure to "ensure Lazada is better positioned to future-proof our business and people".

In response, NTUC and their affiliated union, the Food Drinks and Allied Workers Union (FDAWU), said they were "deeply disappointed" at Lazada's retrenchment exercise.

Lazada, unionised under FDAWU, did not notify or consult FDAWU before it initiated a retrenchment exercise — a move which FDAWU called "unacceptable".

The matter was also escalated by NTUC to the Ministry of Manpower.

On Feb. 5, manpower minister Tan See Leng said MOM had facilitated an "amicable settlement" between Lazada and FDAWU for an "improved overall retrenchment package" for retrenched workers.

Yap: Workers will need to upskill as there are more vacant jobs than those unemployed

SNEF also shared that while Singapore’s economy is expected to grow by one to three per cent in 2024, the labour market remains tight.

According to Yap, while workers are worried about their jobs, employers still have job vacancies which could impede business growth if they remain vacant.

He cited MOM's ratio of job vacancies to unemployed persons of 1.58 in September 2023 — a figure that is higher than pre-pandemic periods, according to the ministry.

Yap elaborated, "The local workforce will need to continually upskill, so that they can better match the needs of employers. Doing so will address the challenges faced by both employers and workers."

NTUC has committees to help workers, will continue outreach efforts

NTUC has developed programmes and initiatives to equip workers with the necessary skills and resources to remain employable, in light of job security concerns, said NTUC and SNEF in a joint press release on Feb. 6.

They added that as of Oct. 31, 2023, over 1,700 Company Training Committees have been formed, impacting over 123,000 workers.

Such committees, which are an initiative by NTUC, aim to help firms transform for the future and to ensure that workers have skills to remain employable.

In the months to come, NTUC will have more outreach efforts to keep workers on the ground informed of the challenges and issues that they may be facing for 2024, the press release added.

The union will also continue to engage with workers to develop additional support measures to help alleviate anxieties surrounding job security.

Ng said:

"Given the lingering pressures of the cost of living, we understand our workers’ anxieties.

So in the year ahead, we hope that there can be pro-active action to support our workers, especially if they are displaced. We should think about a transition support package, in the form of financial and/or upskilling/reskilling support for displaced persons seeking new opportunities in a more challenging environment."

He was echoed by Yap, who said:

“SNEF will continue to support employers to transform their business boldly and responsibly so that they can bring their employees along their transformation journey."

Top photo by Guan Zhen Tan