Singapore business leaders said at a roundtable on January 14 that government schemes to preserve jobs and upskill workers had the right intentions and benefited businesses during the difficult economic situation of 2020, but at the same time, the implementation of these schemes was often not aligned with practical business needs and might even encourage inefficiencies.
The virtual Pre-Budget Roundtable 2021, organized by the Institute of Singapore Chartered Accountants, brought together the heads of multiple industry associations and experts from the Big Four accounting firms, with observers from various government agencies in attendance, to discuss business sentiment and how the government might be able to assist businesses through the uncertainty with this year's Budget. Two main trends rapidly emerged: firstly, the changing nature of jobs, and secondly, the need for greater clarity, communication, and simplification in government assistance.
The economy is changing, and so must companies, jobs, and skills
The panelists shared that in 2020, they had seen a major push for digitalization across most industries, and they expect many of this year's challenges to be related.
“As companies reorient themselves, they are looking to hire young people to help them digitalize,” observed Ang Yuit, Vice President (Strategies, Development & Digitalisation) of the Association of Small & Medium Enterprises (ASME). Based on the experiences of association members, he said, the existing workforce is frequently unable to handle the transition to a semi or fully digital model, and the companies need to invest in redesigning and rescaling jobs.
In some cases, said Low Hwee Chua, Regional Managing Partner (SEA Tax and Legal) at Deloitte & Touche, the challenge is very much around efficiency and motivation. “How to be efficient through remote work; how to motivate people when they are working at home, individually; those are the important things that need to be considered for the professional services organization,” he said.
Businesses will have to do a lot of re-learning about their stakeholders, said Ajay Kumar Sanganeria, Head of Tax at KPMG. “They have to relearn what their employees need, how they will be able to work effectively in a remote working environment or in a digital environment,” he predicted. “We have gone through a major shift in how business is conducted, how employees need to be engaged to be more motivated and more productive. That's going to be a very important, albeit hard journey which businesses will have to go through in the near future to survive and grow.”
Asked about what they hope to see addressed in this year's Budget, the panelists shared three general areas: simpler processes for getting government support, more targeting of that support, and the need to factor in global competitiveness.
Simpler processes for getting government support
The industry representatives agreed almost unanimously that while government support schemes such as the Jobs Support Scheme had been of great help last year to keep companies afloat and people employed, the implementation needs to be more user-friendly—in terms of both simpler processes, a faster turnaround time, and more recipient-appropriate flexibility.
ASME's Ang said that while government programs aimed at upskilling and reskilling have been very helpful, getting support from government agencies can be a “laborious and bureaucratic process”, to the point that companies would rather hire a new person outright than struggle with the funding process to retrain existing staff.
“To hire a mid career person that's out of a job is a lot easier than to justify [to the agencies] why I should get support to reorient a person who was in traditional marketing to digital marketing. We are concerned that with that slowness in getting that into effect, we'll have people that have to be let go because their skills don't match,” he said.
Similarly, Rose Tong, Executive Director of the Singapore Retailers Association, shared that based on feedback from association members, the support schemes are often too prescriptive and do not align with businesses' actual needs, while the process of applying for support is “administratively cumbersome and even challenging”, and even discourages some companies from going ahead with their planned improvements.
The panelists expressed hopes that more information could be made available about the schemes, how they work, and how businesses can access them—a service already in such demand that over the years, an entire small industry has developed just to help businesses navigate the labyrinth of government grants.
More targeted support to sectors and specific needs
Given the urgent need for digitalization and the resulting challenges, several panelists raised the possibility of new initiatives specifically targeting digital needs. KPMG's Sanganeria suggested that the government should provide businesses, especially SMEs, with access to what he described as “digital coaches”—people who can help the business to recognize and bring in the needed technology, then manage its implementation such that it is properly integrated with all the business functions.
Other industries need assistance to professionalize and improve their image, such as the construction industry and some parts of the manufacturing industry. Lam Yi Young, CEO of the Singapore Business Federation, and Douglas Foo, President of the Singapore Manufacturing Federation, flagged these sectors out in particular as having difficulty attracting people to fill their vacancies. Lam attributed the problem partly to a skills mismatch and partly to a mismatch with job-seekers' expectations, and suggested that the skills gap would be easier to close in the short term.
In addition, certain manpower-intensive industries such as construction and retail are facing greater difficulty recovering. Chia Ngiang Hong, President of the Real Estate Developers’ Association of Singapore, flagged these two out as examples of sectors that rely heavily on foreign labor, and have as a result been hit particularly hard by lockdowns and border closures as many workers returned to their home countries and have since not been able to come back to Singapore.. Hopefully, he said, the government can provide more assistance to these industries in particular.
The need to work towards greater global competitiveness
Singapore has always been an open and globalized economy, with local businesses and workers often exposed to competition from all around the region and further. But COVID-19 added an extra layer to that—remote working has both intensified the competition and the opportunities for jobs, while digitalization, although a bumpy road for too many companies, has also provided the opportunity to become more competitive. Panelists suggested that the government could look into adjusting regulations and policies to help businesses and workers alike adjust.
“Today, employees here can work for any global company without even moving out of Singapore,” pointed out KPMG's Sanganeria. “I think there should be support to allow the local workforce to look for job opportunities for foreign companies...And we can look at revamping our tax laws in such a way that those foreign companies are not regarded as having a business presence in Singapore.”
Agreeing on the need for internationalization, Liang Eng Hwa, Chairman, Government Parliamentary Committee (Finance, Trade & Industry) summed up this particular point: “Given that Singapore is a small market, there is a need to go overseas, because if we just rely on our smaller market we are not going to grow—and growth is important in terms of creating good jobs and employment for Singaporeans generally.”
Singapore's 2021 Budget Statement will be delivered on February 16 by Deputy Prime Minister and Minister for Finance Heng Swee Keat.