Firms must maintain workforce strength to get Jobs Growth Incentive wage subsidy for new hires
SINGAPORE: Companies must maintain their workforce strength to benefit from the Jobs Growth Incentive, which provides wage subsidies for new local hires, Manpower Minister Josephine Teo said on Tuesday (Aug 18).
The incentive was announced by Deputy Prime Minister Heng Swee Keat on Monday, and is aimed at helping firms increase the headcount of local workers.
Mrs Teo said S$1 billion has been set aside for the scheme, with the aim of "stretching employers' budgets for manpower growth".
Explaining how the subsidy would work, Mrs Teo cited the example of a company having 10 local staff members on average between January and August.
If the firm makes two new hires in September, it will receive salary support of 25 per cent for the next 12 months for the first S$5,000 of the new hires' salaries.
If the worker is 40 years old or older, the salary support doubles to 50 per cent.
But the company must maintain its local workforce size of more than 10 if it wants to enjoy the incentive for the full 12 months, Mrs Teo said.
The total payout to a company will be reduced proportionally every time there is a "churn of the original team", said Mrs Teo in a Facebook post.
"That’s fair, so companies don’t just benefit from a replacement spree," she added.
For example, if one of the original 10 employees leaves the company and is replaced by a new local hire, the incentive support rate is reduced.
The firm can still enjoy salary support for the newest replacement hire, but the support for that person and other new hires will be at a reduced rate, she explained.
"We will put out more detailed information later this month to help employers understand how (the incentive) is computed," Mrs Teo said.
As Singapore gradually opens its economy and borders, some sectors will recover faster than others, while some may be "completely transformed", said Mrs Teo.
"This means new jobs opening up in some areas even as others see job losses. In the growing areas, we want to nudge employers to hire and also train Singaporeans," she said.
With the Jobs Growth Incentive, companies also get "very substantial savings" on their wage bills that would allow them to be "bolder" in expanding their manpower and bring forward hiring, Mrs Teo added.
"This is after all, Singapore’s biggest push ever for jobs to match the seriousness of impact of COVID-19 on businesses."
Editor’s note: An earlier version of this story said companies need to have more than 10 employees to enjoy the Jobs Growth Incentive. That is incorrect. Companies need only maintain their current workforce strength. We apologise for the error.