MOM reports retrenchments rise in 3Q2023 alongside sixth consecutive quarter of job vacancies decline

SINGAPORE: Singapore’s labour market witnessed expansion in the third quarter of 2023, marking eight consecutive quarters of growth and an addition of 23,600 jobs (excluding migrant domestic workers), as reported by the Ministry of Manpower (MOM).

According to MOM’s Q32023 labour market report issued on Thursday (14 Dec), MOM highlighted the resilience of the labour market despite a weaker economic outlook.

However, it noted a slowdown in the pace of employment growth compared to the previous year, cautioning that ongoing economic challenges would persist and impact the labour market.

Concerning rising retrenchments attributed to reorganization or restructuring

The report unveiled concerning trends in retrenchments, with figures rising from 3,200 in the preceding quarter to 4,110 in 3Q 2023.

These increases were predominantly attributed to reorganization or restructuring (61.9%), with more firms citing business and cost concerns as reasons for retrenchments compared to the prior quarter.

Notably, the majority of the rise in retrenchments was observed in the wholesale trade sector, escalating from 480 to 1,270, while other sectors maintained relatively stable figures.

Continued dip in labour demand

In parallel, the declining trend in job vacancies persisted, dropping from 87,900 in June 2023 to 78,400 in September 2023, indicating a cooling labour demand.

This marks the sixth consecutive quarter of decline, following its peak at 126,000 in March 2022.

Notably, job openings within growth sectors like Information and communications, Health and social Services, Professional Services, and Financial & Insurance Services comprised almost one-third of the total available vacancies.

The report noted that while the ratio of job vacancies to unemployed persons has declined from 1.94 in June 2023 to 1.58 in September 2023, there were still more jobs available than job seekers. The ratio was higher than in pre-pandemic periods.

Amidst these challenges, the report showcased improved re-entry into employment among retrenched residents, rising from 59.4% in 2Q 2023 to 65.3% in 3Q 2023, maintaining overall low unemployment rates.

Rise in resident long-term unemployment

Yet, the Ministry cautioned about the rise in resident long-term unemployment, reaching 0.7% in September, up 0.2 percentage points quarter-on-quarter, warranting close attention.

Across most age groups, the resident long-term unemployment rate remained within the range observed in pre-pandemic periods.

The increase in total employment was smaller compared to the previous quarter (24,300), with the majority of resident employment growth occurring in sectors such as Health and social Services, Financial and Insurance Services, and Professional Services.

While non-resident employment continued to grow by 20,800, it did so at a reduced pace compared to earlier quarters.

The growth in non-resident employment primarily stemmed from the Construction, Administrative & Support Services, and Food & Beverage Services sectors.

The Construction sector, consisting primarily of WP and other work pass (WP+) holders, has seen slowing growth since 3Q 2022. This was also the smallest growth in non-resident employment observed since 4Q 2021.

MOM emphasized the importance of maximizing available programs to bolster competitiveness and resilience amid economic uncertainties.

“We encourage employers to press on with business transformation and equip their workers for expanded or redesigned job roles. Workers are encouraged to continue to upskill and be open to new opportunities.”