EMPLOYERS' READINESS FOR RE-EMPLOYMENT SCHEME

EMPLOYERS' READINESS FOR RE-EMPLOYMENT SCHEME

23.

Mr Viswa Sadasivan asked the Minister for Manpower when the law on re-hiring of retired employees comes into force in 2012 (a) how many Singapore citizen/PR employees are likely to be affected; (b) of these, how many are likely to be in smaller SMEs with less than 20 employees each; and (c) how strongly will the law be enforced on smaller SMEs who may have genuine difficulty in re-hiring retired workers.

Mr Gan Kim Yong: In 2010, there were around 20,000 resident employees aged 60. This is the likely number of employees to be affected by the new re-employment requirements as they attain the statutory minimum retirement age of 62 in 2012 when the Retirement and Re-employment Act (RRA) comes into force.

We do not have figures on the number of local employees in small and medium enterprises (SMEs) with less than 20 employees who will be affected by the legislation in 2012. However, about one quarter of the manufacturing and services workers who make up the bulk of our workforce are employed in SMEs1 of less than 20 people.

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The re-employment law applies similarly to large and small companies. As re-employment provides flexibility to meet the needs of both employers and employees, we expect that the majority of employers including SMEs will be able to re-employ their employees when the re-employment law comes into force. Based on a survey done by my Ministry in 2009, nearly two-thirds (64%) of the companies surveyed already allowed their employees to work past age 62. Of those companies that had employees reaching the age of 62, a vast majority (92%) of their employees were allowed to work beyond 62. However, the survey also shows that larger companies2 are more prepared for re-employment than the SMEs. Seventy-nine percent of the larger companies had already allowed their employees to work beyond age 62, as compared to 62% for the small companies3.

The key challenge faced by SMEs in implementing re-employment is the lack of resources to put in place HR practices and processes for re-employment. For SMEs who require help, we encourage them to tap on the range of resources and programmes that the tripartite partners have put in place to help employers implement re-employment. For example, the ADVANTAGE! Scheme provides a financial grant of up to $400,000 to support companies in implementing re-employment. The Scheme includes a Capability Development Grant of up to $10,000 per company which is targeted to help the SMEs develop proper HR systems to implement re-employment. Employers can also attend the PREPARE Programme offered by ASME, or the 4R ("Recruit, Retain, Re-employ and Re-career") programme offered by SNEF, to equip themselves with the skills and knowledge to implement re-employment strategies.

The Government also provides training opportunities and incentives to companies to upgrade the skills and improve the productivity of older workers, including those employed by smaller SMEs. For example, we introduced the Workfare Training Support scheme (WTS) to reward workers who sustain their training efforts. The WTS also provides higher training grants to employers and low-wage workers including absentee payroll. WDA, together with HDB and the Singapore Institute of Retail Studies (SIRS), has launched the Heartland Retail Workforce Upskilling Programme for retail shops in HDB estates which generally hire small numbers of employees. This program provides coaching to SMEs in HDB estates on how to boost their productivity and rolls out bite-sized training programmes on-site to make training more accessible to workers.

Employers, including SMEs, may seek advice and assistance from my Ministry or the tripartite partners, SNEF and NTUC, so that they will be ready when the re-employment law comes into effect in a year’s time.

1. Based on SPRING Singapore’s current definition, SMEs refer to enterprises with net fixed assets not more than $15 million for those in the manufacturing sector, and employment size not more than 200 workers for those in the services sector.
2. This refers to establishments with at least 200 employees.
3. This refers to establishments with 25-199 employees.