Retrenchment in Singapore: 61.5% of laid-off workers re-entered workforce 6 months post-retrenchment in Q4 2023

61.5% of retrenched workers in Singapore were able to re-enter employment six months post-retrenchment in the fourth quarter of 2023. (PHOTO: Getty) (Edwin Tan via Getty Images)

SINGAPORE — The number of retrenched workers who were able to re-enter employment six months after retrenchment declined to 61.5 per cent in the fourth quarter of 2023 from 65.3 per cent in the previous quarter, statistics from the fourth quarter 2023 labour market report by the Ministry of Manpower (MOM) showed.

However, while the re-entry rate among retrenched workers declined in the fourth quarter of 2023, the ministry said that it remained within the range of 60 to 70 per cent seen during the pre-pandemic years from 2015 to 2019, when the annual average re-entry rate was 65.7 per cent.

Statistics from the report revealed that the number of retrenchments in 2023 was more than double the figure in 2022, rising from a record low of 6,440 or 3.1 per 1,000 employees in 2022 to 14,590 or 6.7 per 1,000 employees in 2023. The ministry noted that the incidence of retrenchment in 2023 was similar to pre-pandemic levels, where the average number of retrenchments was 14,180 or 6.7 per 1,000 employees from 2015 to 2019.

• Also read: Full-time female employees in Singapore got 14.3% less pay than male counterparts in 2023: MOM study

• Also read: Layoffs: Everything you need to know about retrenchments, including in Singapore

• Also read: Job retrenchments in Singapore more than doubled in 2023: MOM's advance labour market estimates

Business reorganisation and restructuring remained the top reason for retrenchments in 2023, with 58.6 per cent of companies surveyed indicating this. According to the MOM report released Thursday (14 March), this is partly due to the impact of global economic headwinds on outward-oriented sectors such as wholesale trade, information and communications services, and electronic manufacturing.

On a quarter-on-quarter basis, the number of retrenchments fell to 3,460 or 1.5 per 1,000 employees in the fourth quarter of 2023. This was a decrease from the 4,110 or 1.9 per 1,000 employees seen in the previous quarter. MOM said that the quarterly decrease was driven by a fall in retrenchments in the wholesale trade sector, which saw a surge in the third quarter of 2023.

Singapore's total employment growth

Total employment grew by 88,400 in 2023. MOM noted that the increase was largely driven by non-residents, comprising 83,500 workers mostly from the construction and manufacturing sectors, given the low resident unemployment rate of two per cent as of December 2023.

On the other hand, the 4,900 resident employment growth in 2023 was mainly in the financial and professional services sector.

For quarterly comparisons, total employment expanded for the ninth consecutive quarter by 7,500 in the fourth quarter of 2023. According to MOM, the increase has "moderated significantly" for both residents (400) and non-residents (7,000) compared to the previous quarter, where total employment growth for residents and non-residents was 2,800 and 20,800, respectively. The ministry added that the moderation was "not unexpected" as weaker hiring expectations and declining job vacancies from previous quarters showed signs of cooling labour demand.

Among residents, employment growth in the fourth quarter of 2023 was in sectors that typically engage in year-end seasonal hiring, such as retail trade, which had 2,400 hires; food and beverage services, which had 500 hires; and the arts, entertainment, and recreation sector, which had 400 hires.

Increased hiring in Singapore in 2024

Going forward, MOM said that its surveys indicate an improvement in business sentiments alongside the Ministry of Trade and Industry's (MTI) forecast of improved economic growth prospects for 2024. Based on its surveys, MOM expects more employers to hire or increase wages in 2024.

However, the ministry also cautioned that business restructuring and reorganisation are expected to continue given the persistent global headwinds. This may contribute to more retrenchments in the year.

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