SINGAPORE — The number of retrenchments in 2023 more than doubled to 14,320 after experiencing a record low of 6,440 in the previous year, estimates from the Ministry of Manpower's (MOM) labour market advance release for the fourth quarter of 2023 showed.
According to MOM, the higher retrenchments in 2023 were due to "notable increases" in the wholesale trade, IT services and electronics manufacturing sectors amid global economic headwinds. Reorganisation or restructuring was reportedly the main reason for the majority of retrenchments.
Despite the higher number of retrenchments, MOM noted that statistics have so far shown that the majority of retrenched workers typically re-enter the workforce within six months post-retrenchment and often in a different sector, signalling the transferability of their skillsets.
More firms looking to hire and increase wages in 2024
Forward-looking indicators from the report suggest that there will be increased employment and improvements in wage growth, MOM said.
The proportion of firms indicating an intention to hire in the next three months rose from 42.8 per cent in the previous quarter to 47.7 per cent in the fourth quarter of 2023. Similarly, the number of firms saying they intend to raise wages in the next three months rose from 18 per cent to 32.6 per cent.
However, the ministry cautioned that business reorganisation or restructuring may lead to further retrenchments, and unemployment rates may edge up as downside risks in the global economy remain.
Muted employment growth in 2023
Meanwhile, advanced estimates showed that total employment in 2023 increased to 89,400, driven mainly by non-resident workers in the construction sector. This was a moderate increase compared to the previous year's sharp employment growth of 227,800, which was the result of a post-pandemic rebound. The slower pace of growth was seen for both residents and non-residents.
Employment growth among residents was spread out across various sectors. Resident employment growth was driven by the health and social services, public administration and education (within the community, social and personal services), as well as financial and professional services sectors.
MOM also reported that unemployment remained "stable and low" in 2023 amid the tight labour market. The unemployment rate for the whole of 2023 was 1.9 per cent, consisting of 2.7 per cent in resident unemployment and 2.9 per cent for citizens.