Budget 2020 offers plenty of help for workforce to stay relevant. It’s now up to S'poreans

It is clear that a focus of Budget 2020 is developing a responsive and relevant workforce to drive the long-term success of the Singapore economy. This is based on the recognition that the way to forge ahead and succeed in the long term is to help businesses and individuals build capabilities and stay relevant.

At the same time, a key plank of the Budget aims to ensure that Singapore can successfully weather the short-term impact of the Covid-19 outbreak.

To help businesses, employees and households through this period of uncertainty, the Government unveiled a S$5.6 billion package, comprising a Stabilisation and Support Package and a Care and Support Package.

The measures seek to alleviate the cost of retaining employees and encourage wage increases despite an economic slowdown.  

New programmes will also be introduced to support the redeployment of workers.

Several other temporary measures such as the corporate income tax rebate, the SME Working Capital Loan and property tax rebate, will also help companies with their cashflow, allowing them to retain and invest in their workforce.

While these measures are welcomed, at the heart of these must be the right mindset: Willingness of employers and employees to make the best of the current operational disruption and “downtime” to enhance the workforce for the future.

STEPPING UP MOMENTUM ON RE-SKILLING

A future-ready workforce is one with the right experience and relevant in-demand skills, regardless of demographics.

For younger Singaporeans, the new Asia-Ready Exposure Programme and enhanced support for the Global Ready Talent Programme will allow tertiary students to gain cross-cultural experience.

For Singaporeans over the age of 25, they will be able to utilise the S$500 SkillsFuture credit top-up announced; while those currently aged 40 to 60 are entitled to an additional S$500 as part of the SkillsFuture Mid-Career Support Package.

The previous SkillsFuture programme has been well-received, with over half a million Singaporeans using their credits to pick up new skills and develop new interests as of end-2019.

According to the Ministry of Manpower, Singapore’s training participation rate for its resident labour force (aged 15 to 64) increased from 35 per cent in 2015 to 49 per cent in 2019.

While MOM did not state how many of these workers made use of their SkillsFuture credits in 2019, the increase in training participation rate reflects the growing recognition of the need to continually upskill and reskill to stay relevant.

Yet, there remains 51 per cent of the population who did not go for training in the 12 months ending June 2019, either due to a lack of knowledge, time or desire. Perhaps this is the reason the new SkillsFuture credits now have an expiry date of five years.

To help businesses develop current and potential workforce capabilities, Budget 2020 also includes a new SkillsFuture Enterprise Credit of S$10,000 per enterprise, and an expansion of the Productivity Solutions Grant and SkillsFuture Work-Study Programmes.

Furthermore, the Government announced a new Job Support Scheme to offset 8 per cent of the wages of employees who are Singaporeans or permanent residents for three months, subject to a monthly cap of S$3,600.

In addition, to encourage companies to hire and retain workers in their 40s and 50s who have undertaken reskilling programmes, the Government will cover 20 per cent of the salary for six months (capped at S$6,000).

Through Budget 2020, the Government is driving greater awareness of the benefits of re-skilling, to encourage companies and employees to build a strong and adaptable workforce together.

To help them make more educated choices on the training programmes to undertake, a group of volunteer career advisors from professional bodies is being assembled to provide guidance.

In the light of the slew of grants and assistance packages offered, companies should be proactive in initiating discussions, providing career guidance and identifying practical training programmes to help their employees develop competencies that allow them to continue contributing to the company’s future success. This should be the case especially for older workers.

WHAT ELSE CAN BE DONE?

The continued focus on the SkillsFuture scheme is both strategic and grounded. Currently, from a personal tax perspective, individuals are allowed to claim a personal tax relief of up to S$5,500 to offset the cost of qualifying courses.

In order to qualify for the relief, these courses are required to result in an approved academic, professional or vocation qualification, and must be considered to be relevant to their current employment.

To provide individuals additional incentive to pursue courses, and given the increasing cost of further education, the Government could look to increase the cap on the personal tax relief for qualifying course fees from the current S$5,500 to say, S$7,000.

In addition, to assist individuals looking to develop capabilities in areas outside of their current job scope, the requirement for the course to be relevant to their current employment could be relaxed. This is where the career advisors could be given power to endorse industry-specific courses to qualify for the relief.

It would also be good for the Government to support employers who provide paid time off to employees that are undertaking external qualifications. The availability of paid time off would empower employees to consider other courses beyond those held at night or during weekends.

From business owners, to young individuals, to senior workers, Budget 2020 has something for everyone, but individuals must take ownership of their future and growth.

In drawing on Singapore’s strong financial position to make investments in our workforce and enterprises amid the current uncertainties, the Government seeks to turn adversity into opportunity. For this to produce the envisaged results, every Singaporean must embrace the same mindset.

ABOUT THE AUTHORS:

Panneer Selvam is Partner, People Advisory Services at Ernst & Young Solutions and Alison McNicholas is Manager, People Advisory Services at EY Corporate Advisors. These are their own views.

CORRECTION: 

In an earlier version of this commentary, it was stated that 51 per cent of the population have not used their SkillsFuture credit. This is incorrect. The 51 per cent refers to those in the labour force who did not go for training in the 12 months ending June 2019. We apologise for the error.