Understanding Employment, Unemployment And Retrenchment In Singapore: Here’s What The Statistics Mean

by DollarsAndSense

As a working adult in Singapore, or someone who wishes to set up a business in Singapore, the state of the economy and job market is a matter of great importance.

Having a clear picture of how things are – and how things are trending – will allow individuals and companies to make informed decisions around their own careers and make sound business plans.

There are many indicators, such as employment figures, unemployment rate, and retrenchment numbers, that can be used to take the pulse of Singapore’s job market, and if interpreted alone and not understood in context, might lead to confusion and disagreement over the health of Singapore’s job market.

Here’s an overview of these various indicators, and the pitfalls of seeing standalone data out of context and using it to make pronouncements about how great (or dire) things are for workers in Singapore.

Read Also: The Singaporean Journey: Through The Lens Of The Singapore Budget

Who Collects And Releases Data On Singapore’s Workforce And Labour Market?

The Manpower Research and Statistics Department within the Ministry of Manpower is responsible for gathering and releasing timely data on Singapore’s labour market and workforce.

It is a gazetted Research and Statistics Unit, which empowers it to issue requisitions for data (such as sending requests for surveys to companies) under the Statistics Act.

Read Also: 5 Earning And Spending Trends We Learned About Singapore Households From SingStat’s Household Expenditure Survey 2017/18

Employed Workforce In Singapore

Preliminary employment figures for 2019 was about 3.78 million, up from 3.71 million in 2018.

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Source: Ministry of Manpower

Employed persons are defined as persons aged 15 years and above, who during the reference period have worked for one hour or more for pay, profit or family gains; or have a job or business to return to but are temporarily absent because of illness, injury, breakdown of machinery at workplace, labour management dispute or other reasons. Unless otherwise specified, full-time National Servicemen are included in the persons employed.

Employment statistics in Singapore are from two major sources. The first is administrative records, which includes CPF records (for local employees) and work pass data (for foreign workers). The second is the Comprehensive Labour Force Survey, which surveys private households in Singapore. The survey excludes workers’ dormitories, and would exclude expatriates who are not based in Singapore, but travel to Singapore regularly for work.

Based on these two sources of information, estimates of the total labour force were then extrapolated. Thus, we should be aware that this data is prone to sampling errors, especially so for results of smaller sub-groups. excludes workers’ dormitories, and would exclude expatriates who are not based in Singapore, but travel to Singapore regularly for work.

The rather loose definition of employment (as having worked for an hour or more for pay) might also convey a rosier picture of employment in Singapore, even though this is supposedly used to be in line with international practices.

Unemployment Rate In Singapore

The preliminary unemployment rate for 2019 was 2.3%, up from 2.1% in 2018. In particular, the citizen unemployment rate for 2019 was 3.3%, up from 3% in 2018.

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Source: Ministry of Manpower

As we are probably aware, unemployment statistics is one of the most closely monitored and discussed indicators of our labour market. In Singapore, unemployment data is obtained from the Labour Force Survey.

Unemployed persons refer to those who are aged 15 years and above who during the reference period were: were not in salaried or self-employment but were actively looking for a job and available for work. The definition used is based on international guidelines recommended by the International Labour Organisation.

In addition to the top-line unemployment rate, there is also the long-term unemployment rate, also known as structural unemployment, and hint at a mismatch in job seekers and job openings available.

Based on the definitions, you can see that employed persons plus unemployed persons do not make up the total resident workforce in Singapore.

Read Also: How Is The Unemployment Rate In Singapore Calculated?

Retrenchment In Singapore Preliminary retrenchment figures in 2019 is 10,700, consisting permanent employees (9,900) and contract ones (800).

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Source: Ministry of Manpower

Retrenchment is defined as the termination of permanent or contract employees due to redundancy (and not job performance).

Retrenchment figures is based on the quarterly Labour Market Survey (which includes participants from the public sector), as well as mandatory reporting by certain companies.

It is worth noting that it is possible to be unemployed without being retrenched (such as quitting voluntarily or being fired), and one can be retrenched without becoming unemployed (if they found a job soon after, or choose to leave the workforce).

Why Its Easy To Misconstrue Labour Market Statistics

As anyone who deals with statistics and figures for a living can tell you, compiling accurate a huge amount of data (such as Singapore’s entire labour market) in a timely manner (at least every quarter) and in a cost-effective way is a monumental task. In order to fulfil this mandate and deliver data within the degree of accuracy that makes it possible to make policy and business decisions, the Ministry of Manpower has to make certain choices and compromises, such as accepting a reasonable amount of sampling errors.

It is by understanding and appreciating how labour market statistics are collected, the technical definitions of various indicators (and not the lay person dictionary definitions), as well as their limitations, can we make sense of this information, interpret trends, and come to (relatively) accurate conclusions.

Posted in Articles, Stay Relevant on Jul 23, 2020