Labor Report for 1Q 2024 and Wage Practices in 2023.
This month’s newsletter covers the latest updates from the Ministry of Manpower, including the Labor Report for 1Q 2024 and Wage Practices in 2023.
We also explore how to handle situations where employees escalate rejected Flexible Work Arrangement (FWA) requests to TAFEP, 3 key areas where HR can enhance business success, and the ongoing issue of mismatched dental benefits due to increasing costs.
Lastly, Pasona Group will exhibit the “PASONA NATUREVERSE” pavilion at the World Expo 2025 in Osaka-Kansai, Japan.
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Labor Market Report 1Q 2024
Total Employment
Total employment increased by 4,700 in Q1 2024, down from 7,500 in the previous quarter. This growth was entirely due to an increase in resident employment, as non-resident employment declined.
- Resident employment rose primarily in growth sectors like Financial Services, Health & Social Services, and Public Administration & Education.
- Non-resident employment saw declines mainly in Construction, Manufacturing, and Information & Communication.
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Unemployment Rates
Unemployment rates inched up slightly in March 2024, reaching 2.1% overall, 3.0% for residents, and 3.1% for citizens. However, these rates stayed within the range typical for non-recessionary periods.
Retrenchments
Retrenchments decreased to 3,030 in Q1 2024, down from 3,460 in Q4 2023. The primary reason for retrenchments in Q1 2024 continued to be business reorganisation and restructuring. This decline was driven by fewer retrenchments in outward-oriented sectors like Wholesale Trade and Electronics Manufacturing.
Outlook
MOM’s forward-looking surveys suggest ongoing improvements in employment due to a better economic outlook for 2024, a steady rise in job vacancies, and greater hiring optimism among firms for the next quarter. We do not expect the recent uptick in unemployment rates to persist, as retrenchments have continued to decline and resident employment growth was positive in Q1 2024.
Full Report: Labour Market Report First Quarter 2024 (mom.gov.sg)
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Wages Practice 2023
In 2023, Singapore’s economy grew by 1.1%, a slowdown from the 3.8% growth in 2022. Despite 82.1% of establishments remaining profitable, more reported decreased profitability, reflecting slower economic growth.
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Wage Change in 2023
- Nominal total wages grew by 5.2% in 2023, down from 6.5% in 2022. Real wages increased by 0.4%, similar to 2022, after accounting for eased inflation.
- Fewer establishments (65.6%) gave wage increases compared to 2022 (72.2%).
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Wage Change Across Industries
Wage growth was observed in all industries, though generally lower than the previous year, except for Administrative & Support Services, which saw an increase due to the Progressive Wage Model.
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Wage Change by Employee Type
- Wage growth was higher for Rank-and-File (4.8%) and Junior Management (6.3%) employees than for Senior Management (4.6%) employees. The wage growth slowdown was less pronounced for lower-level employees.
- Lower-income employees are expected to see continued wage growth, with the Local Qualifying Salary rising from $1,400 to $1,600 in 2024.
- The National Wages Council encouraged the adoption of a Flexible Wage System (FWS). The implementation of some form of FWS remained high at 80.4%, similar to 2022, but full adoption (both Monthly and Annual Variable Components) stayed low at 10.3%.
Full Report: mrsd-report-on-wage-practices-2023.pdf (mom.gov.sg)
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HR’s Journey Up the Value Chain: 3 Key Focus Areas
The HR function has evolved from a ‘business enabler’ to a ‘business accelerator’, with a greater purpose to achieve sustainable growth of people and organisational development. How is HR moving higher up the value chain, and what are the key areas of focus HR teams should focus on as it continues on the journey?
At the Talent & Tech Asia Summit 2024, Mike Chua, Director of HR at NTUC-ARU, highlights 3 crucial areas for HR to drive business success:
1. Strategic Balance: Align HR policies with business objectives while ensuring employee welfare. Customize benefits and maintain a balanced operating budget.
2. Upskilling & Development: Address skills shortages by prioritizing upskilling, designing training programs, and promoting lifelong learning. Ensure job descriptions are up-to-date.
3. Tech Adoption: Leverage technology for efficiency and competitiveness. Use digital platforms for data-driven decisions, optimizing recruitment, and personalizing employee experiences.
For a successful transition, integrate HR management systems, payroll software, and employee dashboards. Don’t overlook mental wellness and effective leadership.
Source: https://www.humanresourcesonline.net/3-key-areas-of-focus-for-hr-on-the-journey-up-the-value-chain (humanresourceonline.net)
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What to do if an Employee Escalates a Rejected FWA Request to TAFEP?
In light of Singapore’s upcoming Tripartite Guidelines on Flexible Work Arrangement Requests, the Ministry of Manpower (MOM) has advised employers on the procedure follow if an employee escalates their rejected FWA request to the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP).
MOM advises employers and employees to settle FWA disagreements internally, and unionised employees can seek advice from their unions.
If internal resolution fails, employees can seek assistance from TAFEP. TAFEP will only step in if the employer did not properly consider and respond to the FWA request, such as rejecting it without valid business reasons.
Here’s what employers need to know:
- Resolve Internally First: MOM encourages internal resolution and union consultation if needed.
- TAFEP Intervention: TAFEP steps in only if the request wasn’t considered properly.
- Custom Approach: Employers don’t need to offer the same FWA to all employees; consider business needs and job scope.
- Communicate Clearly: HR must explain decisions to all affected employees.
- Injury & Discipline: Work injury claims apply to home offices; misconduct policies remain consistent.
- Performance Appraisal: Evaluate based on actual work outcomes.
No one-size-fits-all. Constructive conversations are key to resolving these issues!
Source: https://www.humanresourcesonline.net/clarifying-singapore-s-fwa-requests-guidelines-what-to-do-if-an-employee-escalates-a-rejected-request-to-tafep (humanresourcesonline.net)
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Dental Costs in Singapore Rising, Employee Benefits Lag Behind
Dental care costs in Singapore are rising due to inflation and higher business expenses, yet employee dental benefits aren’t keeping pace. Many workers are paying more out of pocket or seeking affordable treatments in Johor Bahru.
The Singapore Dental Association urges a review of dental benefits and subsidies.
Costs of treatments have increased significantly: for example, basic scaling and polishing at NTUC Health Denticare jumped from $50 in 2020 to $65.40 now.
Benefits vary widely; some employees get up to $1,200 annually, while others get none. Public officers can claim up to $120, unchanged since 2013, while dental costs have crept upwards since then.
HR experts say flexible benefit schemes may help, but more needs to be done to address this growing issue especially post-pandemic.
Source: https://www.straitstimes.com/singapore/dental-costs-in-singapore-rising-but-employee-benefits-not-always-keeping-pace (straitstimes.com)
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Expo 2025: Pasona NATUREVERSE
Pasona Group Inc., the parent company of Pasona Singapore, will exhibit the “PASONA NATUREVERSE” pavilion at the World Expo 2025 in Osaka-Kansai, Japan.
Celebrating their 50th anniversary, the pavilion’s theme “Thank You, Life.” emphasizes respect and gratitude for nature. Led by Dr. Yoshiki Sawa, a regenerative medicine pioneer, the pavilion will explore themes of body, mind, and bonds. The “NATUREVERSE” concept combines “nature” and “universe” to promote a world where everyone values and appreciates life’s gifts.
The exhibition will be held from 13th April – 13th October 2025.
Join us to create a future filled with gratitude and respect for nature!
For Ticketing Information for Expo 2025: Click here.
Read more about PASONA NATUREVERSE Pavilion at Expo 2025: Click here.
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