Thursday, May 1, 2014

Singapore jobless rate inches up in Q1, slowdown in total employment

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http://www.channelnewsasia.com/news/singapore/s-pore-jobless-rate/1090076.html

Unemployment rose slightly in the first quarter of 2014.

Preliminary estimates showed that the overall unemployment rate rose to 2.1 per cent in March from 1.8 per cent in December 2013.

This is according to the latest report by the Ministry of Manpower (MOM) on the employment situation released on Wednesday.

Experts attribute the increase in jobless rate to skills mismatch in the labour market.

The current quarterly unemployment figure is Singapore's highest since December 2011 and, it has taken one labour economist by surprise.

SIM University's deputy director (Centre for Applied Research), Associate Professor Randolph Tan, said: "Usually we don't see that much of a jump from quarter to quarter, even for cyclical reasons.

"So, I think one of the more pessimistic notes that one could read into this, is that there may be some kind of skills mismatch occurring in the labour force.

"The unemployment pool is not providing enough of skills supply for the needs of businesses at this point in time as we go through this restructuring phase."

Experts also attribute the rise in unemployment to recent changes in government policy.

Kelly Services country general manager Mark Hall said: "As a result of the Personal Data Protection Act, companies may have adjusted their workforce to comply with the standards.

"They may see that their sales force aren't allowed to do some of the activities they were used to doing before. So, they may not need the total staff that they need today."

In addition, Mr Hall said companies are taking a longer time to recruit.

He said: "We've seen companies tightening their recruitment process, and also lengthening their recruitment cycles. These could be because they are being more selective, and aligning to government initiatives such as 'Singapore first' policies."

The Manpower Ministry's report also indicates a slowdown in total employment.

For the first quarter this year, total employment grew by 24,900.

The number is the lowest since the second quarter of 2011.

SIM University's Associate Professor Tan said the most significant aspect of the slowdown in employment growth is that it is now closer to the target of making it to what is sustainable, based on Singapore's national population growth rate.

He said: "If we have employment growth rates close to 4 per cent a year, as we've seen for the entire 2013, that rate of growth is not sustainable in the long term, because it would bring us back to the situation where we are going to test our infrastructural limits. So, from a policy-making perspective, this lower growth is not a bad thing."

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