Article

Trends and Shifts in Employment: Singapore’s Workforce

Worldwide shifts in employment patterns may challenge the assumptions underlying current manpower policies.

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Date Posted

12 Jan 2018

Issue

Issue 18, 30 Jan 2018

Technological advancements and changing social norms are significantly altering the nature of work. Disruptive innovations have resulted in more jobs being displaced and more frequent bouts of involuntary unemployment. Digital platforms have made the coordination of components of work more seamless, timely, and convenient, thereby allowing work tasks to be unbundled. Such micro-jobs offer opportunities for workers to earn supplemental income, but come with less job security. Employers that value operational flexibility may favour contingent workers and reduce their core of permanent staff to optimise labour costs. Individuals are likely to experience more frequent career transitions across companies, sectors, and even types of employment, as new job opportunities emerge and existing jobs are redesigned. Workers will have to get accustomed to the prospect of less permanent and more fluid work arrangements throughout life.


A multi-agency approach

The “Future of Work” is a broad and complex topic, and major streams of work are on-going.

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How We Organise Ourselves for Work Is Changing

Recent statistics suggest that traditional permanent employment globally is fracturing. Meanwhile, alternative work arrangements such as contract-based employment, freelancing and self-employment1 are on the rise in the US, Europe, and Asia. Nearly one in four Europeans work independently,2 while one-third of Americans have done freelance work in 2015 alone.3 These trends are partly attributable to domestic labour market conditions, where a lack of viable permanent alternatives following the global financial crisis has resulted in elevated unemployment rates—particularly among youths—amidst a structural decline in labour force participation rates.4 Strong employment protection legislation for traditional employees in Europe also makes non-traditional workers relatively less costly and more attractive.5 The increase in non-permanent employment can manifest itself in different forms: while the UK has seen a rise in self-employment, the US and Germany have mainly experienced increases in term contract employment at the expense of permanent employment.

While Singapore has not experienced a decline in the share of permanent employment, workers may see a gradual shift away from the traditional model of lifetime employment. In future, we expect more transitions in and out of employment and learning during adulthood. Workers may move between different jobs, work arrangements, and even careers, punctuated by periods of unemployment or training (see Figure 1).


Figure 1. Comparison of Traditional and Future Models of Employment

Source: @heathermcgowan and www.futureislearning.com

Traditional Model Employment

 

Future Model Employment
View Figure

Why has there been a shift away from traditional employment?

  1. Workers are more likely than before to work for multiple employers in their lifetime. While some do so voluntarily in search of better opportunities, others are forced to do so due to displacement arising from tech advancements, economic restructuring and/or shorter business cycles.
  2. The emergence of digital platforms is making it easier for individuals to freelance, whether as a primary or secondary source of income.6 The growth of freelancing in and of itself brings potential efficiencies to the economy, better experiences to consumers, and increases the range of choices available to the worker including job options that offer greater flexibility and autonomy and a source of supplemental income. 
  3. Unbundling of jobs into disaggregated tasks, is becoming more commonplace. This trend can be traced back to the 1970s with the rise of outsourcing and contracting. Technology has fuelled the trend, by allowing jobs to be deconstructed and constituent tasks outsourced. A Mowat Centre report, for example, claims that work is being reduced: from lifelong to full-time or part-time jobs; from contract jobs to project jobs; and from task-based jobs to micro task-based jobs. Eventually we may transition to hybrid tasking paired with artificial intelligence or complete automation. In the process each reduction in job scope is associated with a decrease in pay for workers. Hence, as jobs are unbundled, workers may see their wages fall, and over time they may even lose their jobs altogether.7

Many of our existing policies have operated on the assumption of employer-employee relationships as the norm. As a result, many freelancers fall outside some of our social safety nets.

The Freelancing Phenomenon

The freelancing phenomenon or gig economy has captured significant attention globally. Freelancing can be seen as healthy as long it is voluntary and chosen by workers due to the inherent merits of the job (e.g., flexibility and autonomy) rather than due to labour market inequities (e.g., disadvantaged working conditions that make freelancers cheaper than permanent employees).

In Singapore, 82% of all freelancers do so by choice, a much higher proportion relative to other developed countries (see Figure 2). However, these proportions may change over time.

Figure 2. Proportion of Primary and Secondary Freelancers/Independent Workers Who Do So Voluntarily

View Figure

Preparing for the Future of Work

The changing work landscape calls for new perspectives and responses to work and the organisation of work. At the same time, Singapore should continue to hold steadfast to three principles:

  1. First, our ongoing strategy must be to keep the labour market flexible, tight, and responsive.
  2. Second, we must continue to pro-actively invest in skills upgrading, lifelong learning, and to facilitate employment efficiently and effectively.
  3. Third, we should not and cannot stop the rise of digital platforms and the “gig” economy, such as represented by platforms like Uber and Upwork.

Concurrently, we need to build anticipatory capacity to understand how future work arrangements will impact workers and society, and take steps to prepare ourselves for them. Going forward, disruptions to work arrangements are likely to have more frequent and deeper effects on all workers, including permanent employees, term contract employees, as well as primary and secondary freelancers. Many of our existing social and economic policies have operated on the assumption of employer-employee relationships as the norm. As a result, many freelancers fall outside some of our social safety nets. To address this, we will need to consider two key challenges:

  • Enhancing social security and basic worker protections for freelancers: How can we bring freelancers into our policy architecture so that social security, worker protections and other social and economic policies are extended to freelancers?
  • Ensuring industrial harmony amidst changing labour arrangements: Job instability can weaken our social compact and undermine social cohesion; how can we extend measures to ensure industrial harmony with freelancers?

Enhance Social Security and Basic Worker Protections for Freelancers

New models of work are prompting changes to the traditional employer-employee relationship.

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ABOUT THE AUTHOR

Augustin Lee is Deputy Secretary at the Ministry of Manpower. With more than 20 years’ experience in public policy and administration, he has held various appointments in the Prime Minister’s Office, Ministries of Trade and Industry, Health and Labour, and at the National Healthcare Group. He is also Chairman of the Tripartite Alliance for Dispute Management and Deputy Chairman of the CPF Board.

The author wishes to thank Guo Yiran, Lionel Teo, Loh Yuh Yiing, Louisa Lim, Musa Fazal and Damien Huang for their invaluable contribution to the drafting of this article.


NOTES

  1. Sarah A. Donovan, David H. Bradley, and Jon O. Shimabukuru, “What Does the Gig Economy Mean for Workers?”, Congressional Research Service, February 5, 2016, accessed November 22, 2017, https://www.fas.org/sgp/crs/misc/R44365.pdf.
  2. Euro Freelancers, “EU Affairs Freelancers Association”, accessed November 22, 2017, http://www.euro-freelancers.eu/eu-affairs-freelancers-association/.
  3. Upwork and Freelancers Union, “Freelancing in America: 2015”, accessed November 22, 2017, https://www.upwork.com/i/freelancing-in-america/2015/.
  4. Eurofound, Recent Developments in Temporary Employment: Employment Growth, Wages and Transitions (Luxembourg: Publications Office of the European Union, 2015), accessed November 22, 2017, https://www.eurofound.europa.eu/sites/default/files/ef_publication/field_ef_document/ef1557en.pdf.
  5. COEURE, “EU Dual Labour Markets: Consequences and Potential Reforms”, June 8, 2015, accessed November 22, 2017, http://www.coeure.eu/wp-content/uploads/EU-Dual-Labour-Markets1.pdf.
  6. Secondary freelancers include regular employees who moonlight on the side, or students, housewives or retirees who may wish to fill idle hours and supplement their income. Secondary freelancers constitute only 17% of all freelancers in Singapore. But their numbers may grow if fluid work arrangements become more prevalent.
  7. Sunil Johal and Jordann Thirgood, “Working without a Net: Rethinking Canada’s Social Policy in the New Age of Work”, Mowat Centre, accessed November 22, 2017, https://mowatcentre.ca/working-without-a-net/.

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