Employment Trends and Contracts for Fresh Graduates and Young PMETs

Mr Alex Yam asked the Deputy Prime Minister and Minister for Manpower (a) what is the current employment rate for fresh graduates from polytechnics and universities; (b) whether the number of young PMETs on contract employment has increased in the past five years; and (c) whether his Ministry would consider requiring employers to offer fair employment benefits to employees on permanent renewable contracts.

The Minister of State for Manpower (BG [NS] Tan Chuan-Jin) (for the Deputy Prime Minister and Minister for Manpower): Mr Speaker, Sir, we try to ensure that we provide a strong foundation for all Singaporeans via education and continuing training. This is a draw for companies operating here, both local and foreign. We also watch the employment landscape very carefully so that our young Singaporeans continue to have good opportunities when they leave school.

From the 2010 Graduate Employment Survey (GES), over nine in 10 polytechnic and university graduates who entered the job market in 2010 were employed within six months. In the past five years, among employed resident PMETs aged 20-29, the proportion of those on contract employment decreased slightly from 12.3% (or 20,600) in 2006 to 11.3% (or 21,200) in 2010. Amongst all resident employees, the proportion on term contracts has fluctuated between 12% and 13%.

Term contracts are part of the employment landscape. Companies generally hire employees on term contracts for two main reasons. First, contract employees provide greater flexibility for companies to manage their costs in an environment of increased global competition and shorter and less predictable business cycles. This is true globally – outsourcing and non-traditional employment arrangements, including term contracts, have become more common. Second, there are also occasions where companies need to turn to contract employees with specific skill sets not available within the company for fixed-term projects or assignments. Some companies may also place an employee on a term contract for a specific period while they assess the employee's competency and suitability for long-term employment. Further, some employers may pay a premium to their employees to compensate for the short-term nature of certain contracts in certain professions where skills and expertise are in demand. In general, term contracts provide flexibility for the market.

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However, let me emphasise – regardless of whether employees are on term or permanent contracts, we will look after our workers. They are protected under our employment legislation, such as the Employment Act, CPF Act, Work Injury Compensation Act and Workplace Safety and Health Act. Notwithstanding this, we do encourage employers to consider converting their contract employees into permanent staff if they are found to be suitable for the job and if the job is in fact expected to be available on a permanent basis. This will provide greater employment certainty to the employee and help enhance employee engagement.

Mr Alex Yam (Chua Chu Kang): Mr Speaker, Sir, I thank the Minister of State for the reply and the re-assurance to employees on contracts that their rights will be taken care of. However, referring to the same GES that the Minister of State mentioned earlier, out of the total number of graduates who were employed, only 68.5% were on full-time permanent employment while the rest were on temporary employment. This year's preliminary GES also indicates that trend as well. With the increased number and the feedback that benefits, such as medical insurance and leave, are being curtailed amongst younger employees, does the MOM intend to re-look into this area, especially since most of the PMETs would earn above $1,600 and not be fully covered by the Employment Act?

BG [NS] Tan Chuan-Jin: Sir, the figures for 2010 are as follows: total employment rate for university graduates is 90.7%, and full-time permanent employment rate is 84.8%. We do track the figures carefully. The slight difference in figures between the Member's figures and these figures is something we can discuss further later on. I just want to reiterate that having term contracts do serve a purpose, although we are very mindful of the landscape. There are employees who will be on term contracts but we do encourage employers to take them on, on full-time basis, should they be suitable. Most of them, even on part-time contracts, would be subjected to the Employment Act and the various legislations I cited earlier. In terms of the specific concerns – those are things we can look at and will take up the feedback from the industry and from the unions.