Analysts, economists and recruitment experts cautioned that while having more jobs than unemployed persons is generally positive, the figure points to stresses in the labour market that need to be addressed.

SINGAPORE — The Ministry of Manpower’s latest labour market report for the first quarter of 2018 was filled with figures that give cause for optimism, but among them was one that put a grey cloud over it: There were more job vacancies in the market than jobseekers.

Analysts, economists and recruitment experts cautioned that while having more jobs than unemployed persons is generally positive, the figure points to stresses in the labour market that need to be addressed.

If employers are unable to fill these positions, they said, expansion of their businesses — and hence the economy — may be stymied.

Wage inflation may also rise as a result, which could limit the extent to which companies can hire new workers.

More pertinently, they said, the numbers bear out the recent warnings of Singapore’s leaders, who have said that the Government will have to review its foreign manpower policy in the coming years.

The issue was first raised in January by Mr Ravi Menon, head of the Monetary Authority of Singapore (MAS), who said in a speech that the country must "reframe our question on foreign workers", given the limited scope in raising birth rates and labour force participation rate.

In response to Wednesday’s (June 13) figures, analysts contacted by TODAY said that this conversation needs to happen soon, as there is a risk that economic momentum could be affected.

Allowing foreign workers with the necessary skill sets in critical industries would provide a boost for the economy.

However, they also said that the response needs to be a calibrated one due to the sensitivity of the issue.

For now, though, there is good news for workers. Given the growing optimism in the market, economist Francis Tan from United Overseas Bank (UOB) said: “This is a different cycle where things pick up, businesses are more optimistic, and might want to hold on to their existing labour or hire more... It’s on an up (trend).”

Mr Paul Endacott, regional managing director of recruitment firm Ambition Group said that there will likely be “strong hiring” for roles in data science, e-commerce, digital marketing, software engineering, and cloud computing in the second half of 2018, as companies will be focusing on hiring for “key roles to lead business transformation, growth plans and digitisation projects”.

For workers, the advantages will not only be in the form of pay raises. They can also look forward to re-training and “re-skilling”, as well as internal mobility as companies explore other options to fill vacancies, Mr Endacott said.

If the situation persists, Mr Bernard Aw, principal economist at market research firm IHS Markit, warned that there may be a downside.

With improving employment prospects and firms facing greater pressure to hire more people to meet increased business activity, for example, “the struggle for workers could push wage growth higher”, he said, and this could then result in companies slowing down hiring to manage costs.

Mr Tan agreed that in this scenario, businesses may be forced to “temper down” their expansion prospects.

More at https://www.todayonline.com/singapore/labour-crunch-looms-rethink-foreign-workers-may-be-needed-analysts