Commentary: Soon you may be competing with talent globally. The Fortitude Budget is a wake-up call
The huge spike in global unemployment and the rising trend of permanent remote working could buck the anti-globalisation shift that was highlighted in the Fortitude Budget, says employment and labour lawyer Amarjit Kaur.
SINGAPORE: Prior to COVID-19, few would have imagined that at least 80 per cent of Singapore’s working population, if not more, need not physically be at the office to do their jobs.
Employers – some of whom are my clients - were sceptical about how work could be done remotely, and were resistant to the concept of working from home (WFH).
They have since expressed surprise that employees can be just as productive, if not more, while WFH. Conversely, there are others employers who believe that remote working has led to a loss of efficiency and are waiting with bated breath for employees to return to the office.
TECHNOLOGY AND PRODUCTIVITY
What’s the key differentiator between the extensive WFH measures now, and say, 17 years ago, when we were hit by SARS?
Technological advances and digitalisation, for sure.
As Deputy Prime Minister Heng Swee Kiat observed during his recent Fortitude Budget speech, a McKinsey study showed that the world has experienced five years of consumer and business digital adoption in the short span of eight weeks since COVID-19 forced a switch to remote working.
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This accelerated digitalisation prompted by COVID-19 should force employers to radically rethink the future of work.
In particular, a cataclysmic shift in how we view remote working may have been triggered, as employers realise that physical presence at the workplace need not be tied to productivity.
Employers have also begun to think about how their businesses would benefit from enormous savings on rent and other overheads by reducing or giving up their physical office space.
They are not alone in projecting significant upsides in transitioning to a hybrid workforce of onsite and remote employees.
Quick to the game, Facebook has realised that it can improve employee retention and tap on talent it previously wouldn't consider moving to big cities, and has recently announced it will "aggressively" ramp up its hiring of remote workers.
Facebook predicts 50 per cent of its workforce will be working remotely by 2030. Some commentators observed that the tech giant’s move is not all altruistic and is prompted by cost savings.
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However, that should not detract from remote working's upsides.
Twitter, which has allowed its employees to telecommute indefinitely, has likewise rationalised that job seekers won't be restricted to work within the confines of their geographic boundaries going forward.
Shopify is shifting to a "digital by default" mind-set, coupled with a sharp reduction in its physical office space to between 20 to 25 per cent.
GLOBAL TALENT REDEFINED
It is not inconceivable that other companies, including firms in Singapore, could follow suit and may also capitalise on the availability of talent spread across the globe.
Silicon Valley, renowned for being a hotbed for some of the best and brightest talent, has witnessed 40,000 technology job layoffs since March 2020 on account of the pandemic.
This means that the 40,000 talents are now in the job market, alongside the many other newly unemployed across the world.
The confluence of the huge spike in global unemployment – with the rising trend of permanent remote working – could buck the anti-globalisation shift that was highlighted in the Fortitude Budget.
It encapsulates the paradox that even though there appears to be a contraction of jobs in individual countries, the talent market has shifted from being a local pond to become a global pool.
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This trend, if it materialises, cuts both ways: suitably qualified Singaporeans may find themselves vying for the same jobs as talents elsewhere.
Geography and physical proximity to the workplace may no longer determine who gets the job. This has ramifications on the job landscape, the impact of which we have yet to be able to assess.
At present, we have in place the safety net of quotas for work pass holders working in Singapore, alongside other measures geared at protecting and promoting the Singaporean core.
It remains to be seen if and how our private sector labour market will accommodate individuals living overseas performing Singapore-related roles, with the appropriate contractual and tax structuring.
All this discussion begs the question: Is the Singapore workforce ready for the challenge? Being able to adapt and remain productive while working from home is one thing; being equipped and ready for a geography-agnostic talent war is another.
Singapore's workforce ranks 19th in the world according to the World Economic Forum’s Global Competitiveness Report of 2019.
In terms of having an economy competent to develop new digital innovations and future readiness, Singapore ranked second in the International Institute of Management Development’s (IMD) World Digital Competitiveness in 2019.
We need to ensure the Singapore workforce is ready to face the geography-agnostic talent war through urgent upskilling and reskilling.
This goes hand-in-hand with the Fortitude Budget’s S$500 million commitment to helping businesses digitalise, and to boost the nation’s digital transformation efforts.
TRAINEESHIPS AND TRAINING COURSES
The Government's introduction of 21,000 SGUnited Traineeships and 30,000 SGUnited Skills training lasting up to 12 months is both timely and relevant.
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This is coupled with hiring incentives for employers to hire local employees who have completed eligible traineeship and training programmes of co-payment of 20 per cent or 40 per cent of the monthly salary of workers aged below 40 (capped at S$6,000) and above 40 (capped at S$12,000), respectively, for a period of six months.
Despite the strong financial support from the Government, training programmes in the past have been met with a lacklustre reception.
For instance, when SkillsFuture was first launched in 2015, the participation rate was a mere 35 per cent. Even in 2019, the SkillsFuture participation rate was only 49 per cent.
Even before we were engulfed by the COVID-19 pandemic, the Government had, in the first Budget of 2020, urged Singaporeans to "take action early to learn new skills," designing this year's SkillsFuture top-up to expire in five years as compared to the previously indefinite timeframe.
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It is noteworthy that the Government's promise to workers in the Fortitude Budget is that "as long as you are willing to pick up new skills and adapt, to access available opportunities to work or learn, the Government will provide our strongest support to help you."
As bolstering the economy can only be effective with a relevant and industry-ready workforce, Singaporeans need to be prepared to pivot, learn, reskill and be open to change to take on the myriad challenges of digital transformation.
Notwithstanding the challenges outlined above, a valuable addition to the employment landscape is the creation of the new National Jobs Council headed up by Senior Minister Tharman Shanmugaratnam, with a stated focus on creating jobs and building deep skills in conjunction with the Future Economy Council on the overall upgrading of the economy.
The National Jobs Council should be well-placed to point Singaporeans in the right direction in terms of future-proofing their learning and reskilling efforts in the face of geopolitical, economic and social trends on the horizon.
The Fortitude Budget is focused on protecting and creating local jobs, which is what the Singaporean core needs at a time when mass lay-offs seem inevitable.
However, we should be acutely aware of the paradigm shifts caused by digital transformation and the reshaping of talent pools, as sharply hastened by the COVID-19 pandemic.
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Amarjit Kaur is a Partner at Withers KhattarWong in its litigation and arbitration team. She has been noted for her expertise in labour and employment law in the 2020 edition of The Legal 500: Asia Pacific.