Singapore has been facing an aging population for quite a while now. As a developed economy, it provides good healthcare opportunities which have pushed life expectancy rates to rise and become one of the highest for the small nation. But this has not been the only important population dynamic that has impacted how the Singapore workforce, and its population at large, is developing. The other fact that heavily influences the kind of population the country has is its very low fertility rate. This means that young individuals are making up less of the total population and with every generation, the country faces the problems of an aging population to a larger degree. According to Mercer’s study, over 35 percent of the working-age population in Singapore will be above the age of 50 by 2030.
Impact on business
What this means for businesses is that more and more senior citizens of the country are employed and are contributing to growth within Singapore. Data from a report in ASEAN today notes, “In Singapore, today, one in four seniors are still working. The employment rate for those aged 65 and older jumped from 13.8 percent in 2006 to 26.8 percent in 2018. For seniors aged 65 to 69, the employment rate has hit 40 percent by 2015.” To ensure that they remain employable while the threat of tech-based disruption looms at large, it becomes imperative to look at the future employment scenario when it comes to such countries with an aging population.
The threat of Industrial Revolution 4.0 and the increasing usage of automation and AI pose a significant challenge in front of countries that are aiming to keep many senior citizens in the workforce. But while this case is similar to other major aging economies like those of Japan and Korea, Singapore might be better off. A recent report revealed that over 20 major economies worldwide, Asian countries are among the least prepared to combat the threats of societal aging and workplace automation. This is according to a new study from Mercer and Marsh & McLennan Insights, released on Wednesday.
The study called the ‘Ageing and Automation Resilience Index’ took into account the different mitigating factors a country has in place to tackle the challenges of aging and job automation among elderly workers, as well as the strength of their local retirement system, to assess a country's preparedness to manage aging and automation.
While many of the major Asian economies still grapple with both the implications of an aging population and how tech is redefining work structures, Singapore was reportedly better placed among them. The report ranked the country highest out of the four Asian nations included in the index. It placed it — although in the bottom half of the list— at the 13th spot while other countries like South Korea (20) was at the bottom of the list, with China (18) and Japan (17) were noted to still lag behind in creating the necessary frameworks to ensure adequate support is provided to build competencies.
That said, South Korea (31.7 percent), Singapore (26.8 percent), Japan (23.5 percent) and China (21.5 percent) also have a very high labor workforce participation rate for those aged 65 and over, versus the global average of 14.7 percent. Reports suggest that by 2030, Japan will become the world’s first 'ultra-aged' economy, with those aged 65 and over accounting for more than 28 percent of the population, while Hong Kong, South Korea and Taiwan's elderly cohort would make up more than one in four people.
But this doesn’t necessarily mean a fall in employable individuals and countries can still do a lot to ensure senior citizens remain part of the economic mainstream and maintain their earnings. Healthcare and financial planning systems have greatly improved and many can now work well beyond their 60s. Peta Latimer, Mercer CEO for Singapore, noted a similar sentiment as this presents an opportunity for firms to capitalize on a new source of labor. "As semi-retirement and re-retirement become normalized, employers should take this opportunity to tap into an experienced, eager, and productive pool of talent. Inclusive employment requires new ideas for designing work, changing the make-up of the traditional full-time workforce, and rethinking the role of managers.”
The report said employers can also help employees to recalibrate and plan to prepare them for transition rather than be disrupted by it. This includes creating career path assessments around employees’ financial decision making, physical health, and future career opportunities, as well as targeted skills-gap training regardless of age. It is crucial that private and public-sector systems work together to facilitate the transition of older workers into either retirement or renewed work using these mechanisms,” the report said, adding that failing to reinvest the returns from automation into workers would result in “serious fallouts” such as social and income inequality and pressure on pension systems.