Full Employment! Jobless Rate Falls to 10 Year Low

Full employment causes pay spike in rush for talent
Jobless rate falls to 1.7%, a 10-year low; job demand highest in the finance sector

SINGAPORE has roared back to full employment, with its unemployment rate dropping to a level last seen 10 years ago, before the Asian financial crisis. This white-hot job market is compelling bosses to pay, on average, 15 per cent more to entice professionals.

In extreme cases, salaries have doubled. This is most evident in finance jobs. The Manpower Ministry yesterday released flash estimates showing the jobless rate falling to 1.7 per cent for the July to September quarter, down from the previous quarter's 2.3 per cent.

This rate is one percentage point tinier than the 2.7 per cent jobless rate a year ago.

'Singapore is essentially back at full employment,' said Mr Song Seng Wun, research head at CIMB-GK brokerage. Full employment is reached when the unemployment rate is 2 per cent.

All this is causing a scramble for workers, pushing up wages and adding to business costs.
In the race for talent, some bosses are even accepting serial job-hoppers, said headhunters and employers yesterday. One recruiter said: 'Some even change three, four jobs in a year.'

Mr Robert Walters, chief executive of global recruitment consultancy Robert Walters, estimates an average 15-per-cent pay jump this year for professionals.

Another recruiter, Ms Florence Ng, managing director of Michael Page Singapore, said some were offered 40-per-cent pay rises. 'We've even seen a doubling of base salaries in extreme cases.'

In this light, bosses are taking defensive positions, 'offering a more well-rounded compensation package, not just money,' she said.

So there is greater focus on flexi-hours, health schemes, pro-family perks, with one boss even having dinner with different divisions to understand their frustrations. The supply crunch is especially severe in financial services, usually in front-line roles, such as private bankers and relationship managers.

Such developments were borne out in yesterday's report, which showed that services continued to lead the job gains, adding 34,500 workers in the third quarter. Analysts said growth in services is across the board, from full hotels hiring cleaners to the growing pool of property agents and lawyers.

More bright news: new jobs total 171,500 for the first nine months of this year. This nearly equals the 176,000 job gains for the whole of last year. Mr Song projected a 'new record of 235,000 jobs' for this year.

But where will the workers come from?

Manpower Minister Ng Eng Hen told reporters yesterday: 'Our ability to use our own Singaporean population which is well-educated, well-skilled, as well as foreign workers, has allowed our economy to grow.'

But economists like labour expert Hui Weng Tat of the Lee Kuan Yew School of Public Policy wonder if the sizzling growth is sustainable. 'Of the jobs created in the past two years, at least two-thirds of the increase would have come from foreign sources,' he said.

Further job creation of this magnitude will heighten business costs, he added.

Citigroup economist Chua Hak Bin said the building boom here and abroad has raised demand for construction engineers and workers. So, priority may go to commercial and residential construction, while upgrading projects may have to wait.

'Otherwise, there will be escalating wage and inflation costs,' he said, adding that 'these are problems of good times'.

And these are truly good times for workers like process engineer Darryl Koh, 27, who will earn $300 more, or $3,800 monthly, when he starts work at a new company next month.

'Money is not my only consideration. My new job comes with better opportunities and a training stint in the US.'

Analysts said if the economic pie is growing, and costs and profits are balanced, the situation would be manageable. Quipped economist Mr Song: 'Everyone will be able to afford expensive noodles!'

Source: The Straits Times