Commentary: Confidence to ride out COVID-19 has diminished need for continued Jobs Support Scheme

SINGAPORE: What is the cost of saving jobs amid the devastating impact of the COVID-19 pandemic?

Singapore has paid out over S$27.6 billion through the Jobs Support Scheme (JSS) as of September.

An estimated 77,500 jobs or around 3 per cent of local employment was protected as a result of the JSS, according to Deputy Prime Minister Heng Swee Keat, even while businesses struggled to cope with the pandemic-induced disruptions.

JSS A CRITICAL LIFELINE IN 2020

Indeed, the JSS has been an important lifeline, particularly last year, when the concern of many companies was survival.

The JSS helped companies deal with the initial shock, preserve capabilities, and retain employees.

At the height of the pandemic, Singapore’s resident unemployment rate climbed to 4.8 per cent in September 2020, lower than Hong Kong’s 6.3 per cent and the United States’ at 7.8 per cent.

By December 2020, Singapore’s resident unemployment had fallen to 4.4 per cent and continued to taper off, nearing pre-pandemic levels by the second quarter of 2021.

In a survey by Singapore Business Federation (SBF) during last year’s circuit breaker, companies stated a preference for an increase in the duration and level of support of the JSS, over other support measures like rental waivers, foreign worker levies and temporary bridging loans.

After all, the JSS enabled dnata, a global airport services provider, to retain most of its local workers and invest in their reskilling.

These have put the company in good stead as demand for air travel picks up.

The JSS was also critical for local enterprise Burnaby Solutions, which provides hotel accommodation and destination management services for local and international show organisers, and enabled the company to pay staff on time.

Without needing to worry excessively about retaining employees, such firms could focus their efforts on other areas to better recover from the pandemic.

This included pivoting to new areas of opportunities, business transformation and building new capabilities through digitalisation.

For example, dnata rolled out “cool dolly” services at Changi Airport in October 2020, with high-tech containers transporting temperature-sensitive pharmaceutical goods like vaccines and providing an uninterrupted, ultra-cold chain between cargo warehouses and aircraft.

This kept dnata at the forefront of cargo handling capabilities for COVID-19 vaccines.

More importantly, the JSS has held Singapore’s aviation, hospitality and MICE (meetings, incentives, conferences and exhibitions) sectors together – preserving strategic capabilities that help anchor our position as a global node in Asia that is also the centre of a brimming business ecosystem in Singapore.

FROM SURVIVAL TO RECOVERY IN 2021

In 2021, with the gradual, albeit uneven, pickup in global economic outlook, the centre of gravity of concern for companies has shifted from survival to recovery.

Green shoots of optimism can be seen in rising business sentiments. SBF’s survey in June this year found that 80 per cent of companies are confident of sustaining their business over the next 12 months.

That brighter outlook may fuel employment, as 43 per cent of businesses said they intend to increase headcount by up to 25 per cent, in roles such as business development, sales and marketing, as well as IT and engineering.

Companies well on their recovery journey have seen their needs shifting beyond the JSS to benefit from the Jobs Growth Incentive, which provides wage support for an increase in local headcount.

Logistics start-up Ninja Van, for example, is looking to beef up its technology lead, with plans to hire about 200 engineers across Singapore, Vietnam and Indonesia, doubling its engineering workforce to 400.

Leading solar energy solutions provider Sunseap is riding the wave of opportunity in the growing green economy to expand its business. To support this growth, Sunseap is looking to recruit and train 300 locals as solar technologists.

However, the recovery may be uneven. Tourism related sectors like air travel, hotels, attractions and MICE continue to face headwinds.

The recent expansion of Vaccinated Travel Lanes is a welcome boost, along with any continued reopening of borders. The extension of JSS for these sectors until Oct 24 has been key in sailing them through these additional months of hardships.  

Targeted JSS payouts when tightened rules are imposed have helped when speed bumps in the form of the Heightened Alert periods or tightened safe management measures, have impacted sectors like F&B, retail, gyms and fitness studios, performing arts and entertainment.

Such timely support has helped companies tide through periods where the brakes have to be tapped to slow infection spread.

Home-grown coffee-and-toast chain Ya Kun experienced a noticeable drop in sales coinciding with the tightened safe management measures, on top of rising business costs with the increase in food prices and need to acquire COVID-19 test kits and cleaning solutions over the past 20 months.

The JSS not only helped Ya Kun to pay staff in full and on time. It also enabled the company to implement digital solutions to improve its workflow and support the work-from-home arrangements of employees.

FROM RECOVERY TO GROWTH IN 2022

As we head into 2022, with higher vaccination rates giving countries the assurance economies can stay open, the centre of gravity for companies is expected to shift from recovery to growth.

Even the more impacted air travel and tourism sectors are expected to see greater recovery as borders continue to open and travel resumes.

The Singapore economy grew by 6.5 per cent in the third quarter, a sign the economy may be on track for above-trend growth, according to analysts.

US, Thailand and many other countries have announced quarantine-free arrivals for vaccinated travellers over the past week.

As the winds of recovery pick up, and more companies progress on their growth journey, the need for continued JSS has diminished, save for periods of shocks or speed bumps like tightened safe management measures.

Companies by and large recognise that continued broad-based JSS is not sustainable and that they cannot rely solely on the JSS to sustain their business.  

The road ahead may therefore require a switch in support towards capability building, digitalisation, transformation and market expansion through internationalisation.

Wah & Hua, a waste management company, has been tapping on automation and artificial intelligence to reduce its reliance on foreign workers. It is also building an integrated incinerator plant - the first in Singapore to sort recyclables from waste in a single facility using robots.  

To help more companies achieve their best, SBF has various initiatives we hope firms will take advantage of. The Industry 4.0 Human Capital Initiative, launched in March 2020, helped 106 businesses undertake successful transformation and job redesign.

The pilot run of SBF’s MAP initiative to better position businesses for the post-pandemic uplift supported 300 companies, with the second run launched on Monday (Oct 18).

The GlobalConnect@SBF programme has helped businesses seize new opportunities overseas to grow their business, while the Professional Conversion Programme for Internationalisation Professionals will further support companies in building capabilities in support of market expansion.

The JSS has played a critical and crucial role in helping companies to survive the shocks and disruptions brought about by COVID-19.

It allowed companies to stay afloat, preserve capabilities and helped them position for this coming recovery.

The next phase of Singapore’s reopening will see their needs pivot towards business expansion and growth, and support for firms should likewise pivot.  

Lam Yi Young is CEO of the Singapore Business Federation.