SINGAPORE: Recession rumblings have gotten louder with the recent raft of increasingly gloomy economic data and surveys.
Singapore’s 2019 growth forecast has been slashed to 0.6 per cent, down from an earlier estimate of 2.1 per cent in June, said a Monetary Authority of Singapore (MAS) survey report earlier this month.
Local business confidence is at a near two-year low for the final quarter of 2019, according to Singapore Commercial Credit Bureau (SCCB)'s recent Business Optimism Index study. This is in line with the latest findings of the SBF-Experian SME Index which shows dampened optimism among small- and medium-sized enterprises (SME) for the next two quarters.
The job market has also taken a hit. Workers face weaker hiring prospects as employers turn cautious; unemployment has also inched up in the first half of this year, according to the Ministry of Manpower.
The softer job market has made it harder for workers to find a job within six months of being laid off.
Should the economy take a sharp turn for the worse, the Singapore Government has made it clear that help would be ready for businesses and workers.
Some companies are counting on Budget 2020 due early next year to beat the downturn, while others are looking to the S$20.5 billion Resilience Package of 2009 as a model, with its focus on helping good, viable companies to stay afloat so as to keep employment figures as high as possible.
PREPARE NOT PANIC
But rather than wait for policymakers to act, our companies need to move quickly and focus on how to best to position themselves for the future – recession or otherwise.
The economic challenges the Singapore economy faces today are more complex than before. Technological disruption across industries is making knowledge, skills and jobs obsolete faster than ever.
This is compounded by other structural hurdles to growth. We’re faced with a labour pool that is rapidly aging and shrinking, which the Government is addressing with postponed retirement and a drive to get employers to redesign jobs with mature workers in mind.
To improve productivity, there has also been a concerted push for companies to automate and digitise.
With all that comes a pressing need for our workers to be able to unlearn, relearn and be rapidly reskilled to take on new roles that have and will emerge with Singapore’s future economy.
The Government has poured resources into schemes such as Adapt and Grow’s Professional Conversion Programmes and SkillsFuture's Earn and Learn to help workers remain relevant, all with a certain measure of success.
Last year, SBF’s training arm, the SBF Business Institute (SBI), together with Enterprise Singapore and Workforce Singapore, launched the Professional Conversion Programme for Southeast Asia Talent (PCP SEA) for the wholesale trade and logistic sectors to help companies build manpower capabilities for expansion into regional markets.
To date, over 90 companies have benefited from the programme with 150 candidates matched to suitable vacancies. Next year, we expect the numbers to grow.
A SENSE OF URGENCY
While there is no lack of schemes or training incentives for workers and businesses to tap on to keep up with the economic transformation, what’s lacking is a sense of urgency and realisation that investing in skills training will help companies and workers emerge stronger through good times and bad.
Earlier this year, SBF’s annual National Business Survey showed that companies are not investing enough in their employees to address manpower challenges. Only 12 per cent of the over 700 companies surveyed had invested in better training for their employees.
In today’s business environment of continuous change, disruption is the new norm. To brace themselves for short-term headwinds and to thrive in the future, our companies need to press on with business transformation and invest in both technology and their workers.
A recent study by the Boston Consulting Group which analysed more than 5,000 companies across the last four downturns in the United States found that while almost three quarters of the companies experienced a decline in revenue, 14 per cent of the companies flourished both competitively and financially.
What did these one in seven companies have in common? They acted early, took a long-term perspective and focused on growth, not just cost-cutting.
No organisation can reap the benefits of technology without putting employees at the heart of its strategy.
PURPOSE BEYOND PROFIT
During a dialogue at the Singapore Summit this month, Deputy Prime Minister Heng Swee Keat called on business leaders to do more to address the widening inequality brought on by globalisation and advances in technology and the growing intergenerational gap as society ages.
Companies, he says, can do well and do good.
This comes on the heels of a historic declaration by the Business Roundtable, a body that represents the chief executives of close to 200 America's largest companies, last month that shareholder profit is no longer the sole purpose for corporations.
Equally important now is improving society, investing in employees and dealing fairly and ethically with suppliers.
In stepping up to do more for their workers through retraining and upskilling, our companies are also helping to address the 21stt-century economy challenges of low wage jobs and growing inequality.
This is also giving employees a career pathway to more advanced, better-paying jobs and a relevant set of skills, improving the efficiency of businesses and boosting productivity in the economy.
Helping our workers succeed eventually helps our businesses to prosper.
As jobs change, so must the mindset of our workers and businesses. While the learning curve may be steep, workers need to embrace these changes and be open to upskilling, reskilling and second-skilling. Employers on the other hand need to prioritise change management and training for their existing workforce to adapt to the new technologies for growth.
The question here is not if or when a recession will come, but how well prepared our businesses will be to respond. To our companies we say, keep calm and transform on.
Ho Meng Kit is CEO at Singapore Business Federation.