Firms facing Re-employment Act can stay cost-competitive
By Jeana Wong, Channel NewsAsia | Posted: 23 August 2007 2134 hrs

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SINGAPORE: Companies will have to start making preparations to re-employ their retiring workers from 2012 when the proposed Re-employment Act takes effect.

With regards to concerns over the costs of hiring older workers, human resource consultants said it does not have to cost more to keep mature workers on the payroll, even with rising healthcare costs.

They said the key lies in tweaking pay packages to fit the employees' lifestyles and needs.

Kwan Chee Wei, ASEAN Practice Leader, Human Capital Group at Watson Wyatt Singapore, said: "For a 40-year-old worker, I could be paying him S$80 cash to take home and the rest of the S$20 will cover all his other medical benefits and healthcare.

"For a person doing the same job at 60 years old, I could be paying him S$60 cash and using S$40 of the total cost of employment to fund increased cost of medical and healthcare."

Employers can also use a variable bonus system to reward high achievers.

Despite various ways to level the playing field for workers of all ages, consultants said companies in Singapore and in the region are still reluctant to take the lead when it comes to hiring older workers.

Analysts said incentives can speed up employers' mindset change.

But with one in five Singaporeans expected to be above 65 years old by 2020, observers said it is a matter of time that employers would be forced to create jobs that fit older workers.

And sometimes, that means making job duties less physically tedious.

Mr Kwan said: "If you look at a 60-year-old employee sitting in a control room with lots of buttons and dials, that's not a physically demanding job, it's a highly skilled job. This is inevitable in five or ten years' time when we have a fast ageing population and a fast shrinking workforce."

Besides redesigning jobs to make it easier on the human body, consultants said companies would also need to think about how to make the workplace more accessible, such as using ramps rather than steps when designing the office space.


- CNA/so