IN FOCUS: Graduating into a COVID-19 jobs market - short-term challenges and longer-term issues?
SINGAPORE: In April, the future seemed certain for Brian Chee. He was about to finish his final examinations and was on track to graduate from university with a job offer in the bag.
A biotechnology company where he had completed his internship had offered him a full-time position and he was to start work in a few weeks.
But three months later, he found himself still looking for a job.
“(The company) said (the job) would start sometime in May,” said the 25-year-old life sciences major, who graduated from the National University of Singapore (NUS) in June.
“Then it got pushed back to June, then to July. Then in July, they told me that it will be postponed, or it will be pushed back indefinitely because the headquarters decided that they’ll be having a global hiring freeze.”
The first two times the company pushed the offer back, Mr Chee was understanding. After all, there was the recession caused by COVID-19 and the company said it was its first time hiring a fresh graduate, instead of headhunting experienced individuals from other firms.
But when the company eventually told him that he would have to wait indefinitely for the role, Mr Chee decided he could not continue to wait without doing anything in the meantime.
And with student loans to pay off, he was starting to worry.
He sent out 30 applications in the first week of his job search. But his urgency in wanting to secure a job meant that he had to do some prioritising.
“I wanted it to be something that was relevant to my degree or my major, so that’s why I looked for positions in the healthcare, pharmaceutical industry … and then after that, I looked at location,” said Mr Chee.
Which was why he was “thankful” when, in the second week of his job hunting, international drug development firm Covance came back with a traineeship offer as a clinical study coordinator in the clinical research and pharmaceutical industry for 12 months.
Although his workplace is located in Jurong East, this is something he “can live with”, said Mr Chee, who lives in Pasir Ris.
“At least I have a position,” he said.
For many like Mr Chee, the COVID-19 pandemic, which has dragged the Singapore economy into its worst recession since independence, has had a bigger impact than rushed goodbyes in school, cancelled graduation trips and disrupted lifestyles.
Amid rising retrenchment and unemployment rates, some of these fresh school leavers - about 50,000 from various tertiary institutions in Singapore and overseas - found themselves stumbling into a grim reality with hopes of ideal careers and salaries dashed.
The biggest impact is likely in those industries which have come under the most pressure, such as aerospace and aviation as well as tourism and hospitality. There are sectors still holding up and hiring - such as information and communications technology (ICT), financial services and manufacturing - but overall, the jobs market is challenging.
There were 42,400 job vacancies in June, down from 46,300 three months before, according to data from the Ministry of Manpower (MOM).
In turn, the seasonally adjusted ratio of these vacancies to unemployed people fell from 0.71 in March to 0.57 in June - meaning there were fewer than six vacancies for every 10 unemployed people.
“This (ratio) is the lowest since the third quarter of 2009 and we haven’t seen the worst of the labour market yet,” said DBS senior economist Irvin Seah. “It is a very tough climate.”
While they knew it wouldn’t be easy, the extent of the impact - much-longer job searches, job or internship offers postponed or rescinded - still caught people off guard.
Mr Muhammad Ismail Muhammad Ishak, for one, did not expect to send out 150 job applications over the past nine months, and not hearing back from any firm for the first half of the year. Learning from friends about offers being rescinded did not help.
“I got a little sad when all the jobs I applied for did not get back to me,” said the 25-year-old who studied mechanical engineering in NUS. “I had a second class upper honours; I made sure my electives were non-engineering; I’ve done internships … but it seemed like these were still not enough.”
To keep going, he signed up for various courses in the emerging technology industry over the past few months, as part of picking up new skills to beef up his resume.
READ: Challenging job-hunting landscape as recruitment agencies see fewer vacancies and more applications
Others like material science engineering graduate Wayne Lee recalibrated their expectations in hope of striking a balance between interest and reality on the ground.
“I think before we graduated, we had dreams of working in a certain role (or) environment. But when COVID-19 struck and opportunities vanished, we panicked.”
The 25-year-old, who also recently graduated from NUS, had wanted to follow his passion in the social work sector but as weeks turned into months, he knew he had to start casting a wider net. Anxiety hit the roof when Mr Lee found out that his mother lost her job in June.
“Suddenly that luxury of thinking that 'My family is ok' and I have time to find a job disappeared,” he recalled.
“Even though my parents said they had savings, not knowing how long this pandemic will last made me feel that I have to get a job to at least make things more comfortable at home.”
The challenges faced by this new cohort of workers have not gone unnoticed.
As part of the slew of support measures rolled out by the Government, the SGUnited Jobs and Skills Package aims to create close to 100,000 opportunities, with 21,000 out of 25,000 traineeship positions going to local first-time jobseekers.
These traineeships can give fresh graduates opportunities to develop industry-relevant skills and build professional networks, which will help boost their credentials to potential employers, said MOM.
University graduates will get a monthly training allowance of between S$1,800 and S$2,500 under the SGUnited Traineeships programme, of which 80 per cent is paid by the Government. The allowance for polytechnic graduates ranges from S$1,300 to S$1,800, while graduates from the Institute of Technical Education (ITE) receive S$1,100 to S$1,500.
READ: Fortitude Budget: More than 40,000 jobs to be created as part of S$2b employment, training package
This week, Manpower Minister Josephine Teo said in Parliament that more than 20,500 traineeship and company attachment opportunities have been made available under the SGUnited Traineeship and SGUnited Mid-Career programmes.
More than 2,800 job seekers have taken up these opportunities.
The minister did not provide a breakdown in terms of fresh graduates who took up these traineeship opportunities. But in a separate speech in Parliament last month, she said more than 1,000 fresh graduate trainees have been placed under the inaugural programme.
Observers have described the government-backed inaugural traineeship programme as a step in the right direction.
ManpowerGroup Singapore’s country manager Linda Teo said it helps fresh graduates to gain experience and exposure, especially in jobs that they were interested in but not directly related to their field of study, as well as grow their network.
The programme is an attempt to prevent a “lost generation of fresh graduates”, said Mr Adrian Choo, founder of career consultancy Career Agility International.
Citing personal observations, he noted that such a situation had occurred during 1998 to 2003 when big firms cut back on hiring, especially fresh graduates, as the local economy dealt with successive hits from the Asian Financial Crisis, the bursting of the dotcom bubble and the severe acute respiratory syndrome (SARS) outbreak.
That later resulted in a shortage of talent for middle management roles in these big firms, said Mr Choo.
“The Government is recognising that and they don’t want this to happen again. That is why they are having these traineeships – a form of subsidised employment,” he added.
READ: 2,800 job seekers placed in traineeship and company attachments under SGUnited Jobs and Skills programmes
Recent graduates who spoke to CNA said that they were glad for the traineeship opportunities, in lieu of having a full-time job.
For 26-year-old Shivaram Rasu, currently doing a traineeship as a research assistant with the Lee Kong Chian Natural History Museum, a traineeship is about getting experience.
“I was looking at options of getting into research (via) a full-time job. But the thing is the economy isn’t so stable now, so I decided to try out a traineeship instead.
"The pay is obviously lower but the job scope is about the same. so I’m glad I’m able to get experience in the field because it’s still relevant to me,” he said.
Similarly, while Mr Chee hopes the 12-month traineeship would eventually turn into a full-time position, he said he is just “glad” for the chance to gain some experience, which could put him in better stead for his next job hunt - a prospect which he has already had to adjust his expectations for.
“I’ll expect that the pay will definitely be lower than before the recession,” he said, as he discussed future expectations for his post-traineeship job.
“Competition for the job will definitely be harder … because there will be more people applying for the same position.”
Another programme that helps ITE and polytechnic graduates in their job search is Workforce Singapore’s Career Starter Programme.
However, a spokesperson told CNA last month that they have not seen a “significant” increase in the take-up for workshops and personalised one-to-one career coaching, “partly due to the current COVID-19 situation”.
SUPPORT FROM SCHOOLS
Tertiary institutions have also stepped up to help their graduates.
The Singapore Management University (SMU), NUS and the Nanyang Technological University (NTU) curate job offers on their respective job portals and have held virtual career fairs for their students.
Universities and polytechnics have also extended career guidance for graduates, with SMU’s career coaches “proactively” reaching out to all its 2020 graduates to check on their employment status and offer coaching if they have not secured employment.
The school also increased its number of online Employability Clinics, giving priority to those seeking full-time jobs, said Mr Sim Cher Young, director of the Singapore Management University’s (SMU) Dato’ Kho Hui Meng Career Centre. SMU has 1,884 Bachelor’s degree graduates this year.
Republic Polytechnic (RP) said it provides individual guidance to graduates through its personalised one-on-one e-counselling sessions, with general feedback being “very positive”.
The NUS Centre for Future-ready Graduates “intensified” its graduates’ training to prepare them for digital interviews, and providing career webinars to help them understand the job market, write effective resumes and participate in career networking.
The university is also tapping its network to identify full-time jobs, internships and traineeship opportunities for its graduates, said the NUS spokesperson. NUS has 7,000 first-degree graduates this year.
Another NUS initiative compiles the CVs of graduating students into a book by sector, giving them to employers for recruitment. In addition, students receive a weekly curated list of jobs, sorted by major.
For those who prefer to continue their education, they can opt for the Continuing Education and Training (CET) modules with their respective tertiary institutes.
NUS, SIT, Ngee Ann Polytechnic (NP), Singapore Polytechnic and RP provide a number of free CET modules for their graduates.
Meanwhile, NTU has given its Class of 2020 an additional S$1,600 in alumni credits - on top of the existing S$1,600 for all alumni - that can be to offset fees for a suite of CET courses. The bonus credits are valid until June 2021 and are part of the university’s two COVID-19 relief packages.
Temasek Polytechnic (TP) identified 17 programmes with up to 2,100 training places, which can equip students with “in-demand knowledge and skills that will put them in good stead when the economy picks up”, said its spokesperson.
There are also 28 post-diploma courses that graduates can choose from.
In addition, TP provides a one-time credit of S$500 to each graduate to sign up for these courses, to ensure that “students are left with no out-of-pocket expenses” as they upskill and expand their skillsets.
Graduates can also take advantage of full-time and traineeship positions with their universities or polytechnics.
Under the SGUnited Traineeships Programme, SIT hires graduates to work on projects done in collaboration with industry wherever possible.
NUS has offered 200 full-time salaried positions and 800 paid traineeships under its NUS Resilience and Growth Initiative, which was announced on Apr 24.
And NP has created 100 traineeship positions and more than 80 campus jobs. To date, 50 per cent of these traineeships in Learning and Design, and 50 per cent of the campus jobs, have been taken up, said a spokesperson.
In the longer run, the tertiary institutions are working to improve the employability of future graduates by updating their curriculum.
SMU uses real-world settings in their courses, while parts of its curriculum are experiential, exposing students to immediate industry problems and questions.
The university also emphasises international exposure and experience. To that for the current academic term amid the travel restrictions, the university tapped on faculty collaboration with foreign instructors and remote work that allow students to work on industry or community service projects with overseas partners.
NP too, has introduced digital components to its Diploma of Tourism and Resort Management and Diploma in Hotel and Leisure Facilities Management to keep its students competitive amid digital transformation and disruption.
But the distress faced by the class of 2020 could go beyond a discouraging job hunt in the near term.
Some overseas studies have found more worrying records of longer-lasting negative outcomes associated with graduating into a recession, such as lower earnings for years.
One such study by economists Philip Oreopoulos, Till Von Wachter and Andrew Heisz, looked at Canadian college students who joined the workforce during the downturns in the 1980s and 1990s.
This batch of graduates, according to the 2006 study, saw lower earnings in the initial stage – about 9 per cent less than those who graduated in better economic conditions – as they tend to start out at smaller, lower-paying firms or jobs that are less well-matched to their skills. This setback in earnings can stick around for as long as 10 years, with the graduates playing financial catch-up by switching jobs more frequently than others. By then, they had lost an average of 5 per cent of their lifetime earnings.
Another study focused on those who left school during the 1982 recession in the United States and found that the impact on earnings could last for 10 to 15 years. The 2019 study by researchers Hannes Schwandt and Till Von Wachter also noted longer-term chain effects in other aspects of life, such as higher divorce, childlessness and death rates by the time these graduates reached middle age.
Reading about these studies can be unnerving, said Mr Ismail.
“The long-term consequences in the overseas study I read gave me a shock, especially the potential earning losses,” added the mechanical engineering graduate.
“That’s money that can be used for investment, extra learning or anything else so it made me feel like I really need to take this seriously otherwise I might end up as one of these recession graduates.”
A 2011 study by the Ministry of Trade and Industry (MTI) attempted to examine the long-term impact of recessions on the wages of local graduates by tracking those who entered the labour force between 2000 and 2007.
It found that while there was an initial wage loss for those who graduated amid a weak economy and dismal job market, this negative hit would “diminish over time and fully disappear after three years in the labour market”.
“Singapore’s labour market would thus appear to be efficient enough to prevent the perpetuation of downward wage persistence for ‘unlucky’ cohorts of graduates,” the MTI study concluded, although it noted several caveats.
For one, the longitudinal data spanning just eight years was a “short timeframe” that covered only one recession when the Singapore economy shrank 1.1 per cent during the dotcom bust in 2001.
Wage data for many of the graduates in the study were also shorter than four years, meaning that researchers were unable to observe how the “unlucky” cohorts of graduates fared against their peers after catching up in wages.
“We cannot rule out the possibility that entry economic conditions could have long-term negative effects not captured within the period of observation,” the study said, adding that similar studies conducted overseas tend to have much longer observational periods of 12 to 22 years.
The MTI study also noted how it was unable to determine whether recessions affect segments of university graduates differently, as information on individual ability and job switches was not available.
BIGGER HIT ON ECONOMY, HIGHER RISKS?
Some observers of the local economy said results from the MTI’s study could boil down to Singapore’s ability to bounce back relatively quickly from past downturns and having low unemployment.
“Most of the studies are based on overseas economies. Singapore is quite different,” said Mr Seah.
Singapore has “a nimble economic structure”, with the Government having much-needed resources to put together “highly responsive” policies when a crisis strikes, he added.
“We are able to reinvent ourselves quickly during major crises … and that in some way, contributed to how we don’t see that kind of permanent effect on those who happen to graduate during the bad times,” said the DBS economist, noting that Singapore is also a meritocratic society that rewards individuals as long as they work hard.
The economy has also been able to churn out “more jobs than can be filled” by the local labour force, throwing up career and wage progression opportunities, said CIMB Private Banking economist Song Seng Wun.
Whether Singapore can keep doing so will depend on how it maintains its economic competitiveness and relevance as a global business hub in a post-pandemic world, he added.
“It’s typical in a recessionary environment to see more cautious hiring and pressure on wages, unless you are in sectors that are in demand. When the broader economy improves and you see businesses more confident about the future and thinking about expanding or hiring, you will be able to ride along with the recovery, switch jobs and command better salaries.
“Wages will adjust in a normal cycle when demand for labour goes up so we mustn’t get stuck in the notion that just because you are starting at the lower end, you’ll always be at the lower end unless you’re in a sector that’s no longer in demand,” Mr Song said.
“So long as Singapore stays relevant to the world by continuing to create new industries and remaining an attractive destination for businesses to set up shop, there will always be job creation.
“If more jobs are created than can be filled by the local labour force, then you should never have any doubt that you will be able to ride on the recovery,” he said, adding that individual skillsets also matter in a changing world.
READ: Singapore's third-quarter GDP shrinks at slower pace of 7% after economy gradually reopens following circuit breaker
Unprecedented help is also at hand as the Government recognises the toll of a historic recession, said Mr Song. Apart from the national traineeship programme, other initiatives to help firms adapt and survive the pandemic also serve to cushion the impact on fresh graduates.
Echoing that, Mr Seah said the slew of support measures unveiled thus far has been “significantly stronger and far more comprehensive” compared to those in past crises.
Apart from saving jobs, the Government is also looking at job creation with the new Emerging Stronger task force looking at reinventing the economy for a post-pandemic world.
Mr Seah cited his personal experience of being a “recession graduate” – not once but twice.
He was a fresh university graduate in 1999 when the Singapore economy was still reeling from the Asian Financial Crisis. After six months of fruitless job hunting, he decided to head back to school but found himself in a similar situation after finishing his Master’s degree in 2001. That year, the economy fell into a recession due to the dotcom bubble burst in the US.
“Back in 1999, we didn’t have initiatives like the Jobs Bank. You just rely on the Straits Times’ recruit section that comes every Saturday. I’ll spend half the day going through every single job advertisement and the rest of the day typing out my application letters so that I can mail them out on Sunday.”
“I sent out about 40 applications for all sorts of jobs … but I didn’t get a single phone call,” Mr Seah recounted. The discouraging job hunt repeated itself in 2001 for about six months until he landed his first job.
While graduates like him had a rough start, they eventually managed to catch up financially and professionally, said the DBS economist, citing his own experience as well as that of his friends.
“Many of my friends are doing well. I don’t think there was a lost year so to speak,” he said.
With the step-up in help from the Government for fresh graduates amid the ongoing crisis, he added: “It is definitely a good thing that policies are headed in this direction, which is why I’m even more optimistic about the graduates’ longer-term career prospects.”
To be sure, there are others who hold a more cautious view.
The severity of the economic slump and the likelihood of a protracted recovery given the uncertain nature of the coronavirus pandemic could leave more economic scars on the class of 2020, according to NUS senior economics lecturer Kelvin Seah and Maybank Kim Eng economist Chua Hak Bin.
“Never before have we seen a crisis so serious to the extent of having a ‘circuit breaker’ and shutting our borders so I’d imagine that the impact could be worse than anything we’ve experienced before,” said Dr Seah from NUS.
Dr Chua said the coronavirus-induced slump has resulted in “massive” job losses thus far, with the full-year number likely to be between 180,000 to 220,000. While the economy could see positive growth next year, it would only be in 2022 that economic growth will return to pre-pandemic levels. This means a “sluggish and choppy” recovery ahead.
“We don’t know how long this virus will be here for and even when a vaccine becomes available next year, most still think that it would not be widely distributed so quickly. Many of the border controls, for example, could remain with us for some time,” he explained.
“To us, it’s more of a U-shaped recovery and it will differ across sectors,” he added, noting that while a still-growing industry like manufacturing will probably emerge from contraction by the fourth quarter, others like aviation, tourism and hospitality could be in for a long winter for as long as four years.
Graduates in these sectors, as a result, will inevitably be hit more than their peers.
“For people who have trained or invested in education for these sectors, they may not go into these sectors. There will be a lot of movement of workers in sectors; it will be difficult and that is why job matching and re-skilling is so important,” said Dr Chua.
“So it looks as if this recession is going to leave a lot more scars than the last one.”
While COVID-19 has the most visible impact economically, there are other consequences at play too, said social scientists.
In the short-term, graduates will likely experience the “fear and anxiety” with being unable to land a “decent job” expected of a graduate and young adult, which enables them to “exit their adolescence”, said NUS sociologist Tan Ern Ser.
And with the disruption of their education, this could affect students who establish their social networks within the university, said NTU social scientist Andy Ho.
“People who really establish their social network in the university system, that network has been disrupted drastically, and not being able to maintain that social network plays a potential role in affecting their identity formation,” he said.
As university is a “critical age” for people to form their identities, not being able to have closure on that chapter would affect them “for sure”, added Associate Professor Ho.
With students having to “refix their expectations” of graduating in “normal circumstances” which is “not normal anymore”, this comes with a cost for their emotional well-being and quality of life, he added.
READ: The Big Read: Amid the crisis of a generation, losing one’s job takes a heavy emotional and mental toll
In the long-term, uncertainty over their economic situation could lead to graduates prioritising their careers and delaying marriage and childbirth.
“I believe young Singaporeans believe in putting their careers on a sure footing so as to be able to attain a sustainable, desirable family lifestyle. And if they can’t, they would likely delay marriage and childbirth. Or they may just cohabit,” said Dr Tan.
WHAT MORE TO DO
With COVID-19 set to bring about long-lasting impact on workers, jobs and businesses, Deputy Prime Minister Heng Swee Keat noted ongoing talk of a global “lockdown generation” who will have their skills, employability and incomes permanently affected even after the pandemic ends.
Singapore must work to prevent a “COVID Generation” of workers and students, he had said in June during a wrap-up speech on the Government’s fourth tranche of relief measures in which the SGUnited Jobs and Skills Package were part of.
On top of existing measures, improving job mobility is one area where more can be done.
Tampines GRC Member of Parliament Desmond Choo described this as “paramount” with the coronavirus-induced recession being unprecedented in scale, depth and duration. Its negative impact on fresh graduates could “reasonably … last longer” than the three years mentioned in MTI’s 2011 study, he said.
Companies should be encouraged to convert traineeships into permanent roles, while the Government can also customise incentives via the Jobs Growth Incentive to nudge employers to do so, he suggested during the debate on the President’s Address last month.
Echoing that, Associate Professor Walter Theseira said: “It is through those job switches that graduates eventually return to their better-matched career paths (or) jobs.
“Hence, what we should think about, to improve the chances of that in the future, is whether our policies support good job mobility.”
While he is not aware of any study on structural impediments to job mobility here, the Singapore University of Social Sciences economist pointed out a few areas of concerns: Employment bonds, no-compete clauses found in work contracts and non-universal healthcare benefits which may deter some from switching jobs.
It is also critical for Singapore to take “a moderated approach to foreign employment” even when the economy recovers.
“This is because we want to ensure that our own people have the best chance of being considered first for upgrading job switches as the economy gets better,” Dr Theseira said, noting that this will be painful for businesses who will be looking to expand urgently in good times.
“But if we don't do it, we may leave behind Singaporeans who were mismatched into jobs because they graduated in a recession,” he added.
For now, fresh graduates will have to be realistic in their expectations and keep in mind that graduation is not the end to learning.
“Don’t be too picky … Get your foot in the door first and learn”, said Mr Choo.
Those in badly-hit industries can try building up transferable skills and relevant experience so as to be able to secure jobs once demand returns, said Ms Teo from ManpowerGroup Singapore.
Overall, “very different” skill sets will be required in a post-pandemic world, which is why one’s ability and openness to learning will be critical, she added. These include communication, negotiation, analytical thinking and other people-oriented skills, which are transferable and in demand by employers across industries.
Mr Choo added that the building up of such skills will require people to actively manage their careers.
“Don't count on your employer to develop your career. Be active in thinking where the growing industries are, the skills needed and how you can get those skills,” said the career coach.
“Even if it was true that people who graduate in a recession may not find a footing as good as someone graduating in a good year, it’s one thing to sit down and cry and another to actively manage your way back into the opportunity area.”
All these are not lost on the young graduates whom CNA spoke with.
“Even the CEO of PayPal has said that whatever transformation that is supposed to happen in five years is now condensed into a few months. Obsolete skill sets in a shifting economy is now a legit concern,” said Mr Lee, who started a full-time job about two months ago.
Noting that he is now "more cautious" in career planning, he added: “Now more than ever, you need to constantly upgrade yourself.”
Mr Ismail, who turned his anxieties into action by signing up for various courses over the past few months, has found a traineeship position as a business analyst with DBS after taking professional certificate classes in financial technology with his alma mater.
He said he is aware that he will need to be able to apply what he has learnt “to make the skills real”, and is determined to make the best out of the traineeship even though he is unsure if it will pan out into a permanent role.
“For the next nine months, I'll be a sponge – just absorb everything I can. Be brave to say 'I don’t know' and if there are criticisms, take them humbly. This whole experience has made me more hardy, I feel.”