Dealing with Graduate Under-employment

Mdm Speaker, graduate under-employment is an issue that many governments worldwide are grappling with, including in developed economies where graduates are experiencing challenges in securing jobs which match their skills and expertise.

In many countries, graduate under-employment is due in a large part to a high or increasing proportion of degree holders entering the workforce, at a time where their economies are unable to generate sufficient good jobs for these graduates. This is exacerbated in cases where there is a mismatch between the courses of study and the skillsets required of the jobs available. The disruptive effect of technology on the nature of jobs also means that graduates who are unable to update and upgrade their skills may face challenges staying relevant in their fields.

Singapore's resident graduate under-employment rate is low and stable, at 2.3% in June 2013. While we are not facing the unemployment and under-employment problems in other countries, we will not be immune to these trends. The proportion of degree holders in our workforce has been increasing. We are seeing increasing access to private educational institutions or alternative routes which offer degrees of varying quality, despite their sleek packaging. Those who spend time and money going to these institutions may bear a greater risk of under-employment. The market has begun to differentiate between degrees that carry their full worth in knowledge and skills, and those that are essentially paper qualifications. We should encourage our young to pursue their interests and go for substance when considering their education and career paths.

We will also need to keep up our efforts at ensuring that graduates have the skillsets to take on quality jobs. Our first strategy is to keep our economy vibrant and competitive, so that enough quality jobs can be created. This means we must press on with our restructuring efforts, as well as to continue to grow industries which offer good jobs and, therefore, good opportunities for all Singaporeans. We need to attract the right companies to invest and grow their businesses here.

At the same time, we need to help individuals to equip themselves with the skills to take on the quality jobs of today and also of tomorrow. The SkillsFuture Council will help

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spearhead efforts on this front to develop an integrated system of education, training and career progression for Singaporeans. This involves helping individuals to make informed choices on education and training, and strengthening the linkages between education and training institutions and industry needs.

Employers also have to recognise the value in investing in the training of their workers and help them achieve mastery of skills. Overall, we have to create a culture where workers are motivated and able to continually acquire relevant skills and experience that will help them advance in their careers. This includes degree holders, who must also take ownership of their individual career and training development throughout their lives.

I thank the Minister for his response. I fully agree with the Minister that it is critical that our students pursue degree courses that are sought after in the workplace, and that our PMEs need to embrace lifelong learning in order to future-proof their skillsets. However, I would like to ask the Minister two supplementary questions.

First, how can the Government help to mitigate competition for jobs from foreign PMEs? Many Singaporeans feel that they are sometimes passed over for jobs they can do because foreigners come cheaper, without the need for CPF contributions and are free of National Service obligations, to name a few. Would the Minister consider implementing labour market tests already in place in other countries, such as Hong Kong, so that Singaporeans with relevant qualifications and experience are given priorities for jobs that they wish to do before companies resort to hiring foreign executives? So, that is the first supplementary question.

The second is whether the Government would consider launching a targeted internship programme with special incentives for companies to provide Singaporeans with relevant experience, especially for young graduates and mid-career executives seeking a change in industry so that they can gain the necessary experience and exposure to be fully deployed in the future.

Mdm Speaker, I would like to thank Ms Foo for her two supplementary questions.

With regard to the first question on competition, as I have mentioned a couple of times in the House, the truth of the matter is that foreigners compete with us whether they are in Singapore or not. This is the effect of globalisation. It does not just affect Singapore but it affects many countries in the world. In a large part, you will find that companies go round the world in search of where they can operate most effectively and on the most cost-

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effective basis.

Singapore, as we know, is not the cheapest place to operate but there are a lot of strengths operating in Singapore. Companies are attracted here for a number of reasons. In fact, just last week, I had a meeting with the US-ASEAN Business Council and one gentleman shared that when he relocated here, it was one of the best decisions that he made because they have access to Singaporeans who are well skilled, hardworking, talented and capable. One of the pluses here is that we also do have access to a diverse workforce. Many of the companies that are established here – both foreign and local – are multinational in nature. Some of them are global headquarters, some are regional headquarters. They are looking at diverse workforce because that affords them that diversity in exposure and talent for them to be able to reach out to the world. When they are here, they create opportunities for Singaporeans.

Foreigners here do compete with Singaporeans, but having them here does keep the economy competitive. But at the same time, on a net basis, it benefits us because it generates jobs.

We are mindful that there are concerns about competition. We have taken a number of steps over the years. For example, the way we have structured the employment pass, the entry-level salary regime and the tiered salary regime which takes into account age, experience and the salaries required. Those are measures we put in place to help to even out the playing field for Singaporeans. The Fair Consideration Framework was also put in place to ensure that those companies who do want to apply for employment pass would have to make those jobs available in the Jobs Bank so that Singaporeans do have access to apply for those jobs as well. If companies are found to be carrying out practices which are less than fair, we will investigate and follow up accordingly.

Importantly, the best solution is to ensure that the economy is vibrant and is doing well. We are not doing too badly on that front. In terms of specific initiatives, there are existing programmes to help graduates. We have the Professional Conversion Programmes or PCPs. It basically supports job seekers to re-skill themselves, obtain necessary job competencies to take on new jobs. And some sectors with PCP programmes include Biomedical Sciences, Creative Industries, Early Childhood Care and Education, Food and Beverage, Healthcare, Information Communications and Technology, and Marine and Maritime.

We also have the Max Talent Programme where we enhance the HR capabilities of Small and Medium Enterprises (SMEs) in the recruitment and management of newly hired PMEs. This initiative also matches unemployed PMEs to suitable jobs in SMEs.

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There is also the Enterprise Training Scheme (ETS) where we assist firms to develop holistic training plans and career progression pathways which are tied to employees' training roadmaps. As at March 2014, the ETS has benefited 96 companies, of which 70% are SMEs, and 17,500 local workers.

So, there is a range of schemes available. We are quite open to exploring new ideas and initiatives to help our graduates at different levels to be able to continue to find jobs. The concerns expressed by Ms Foo are something that we track closely in terms of unemployment and also under-employment. And by and large, I think the numbers are low but I would say this: "low" does not mean there is no unemployment. For those who are unemployed, even though they may form a very low statistic, their concerns are genuine. We will do all we can to assist this group as best as possible.

I wish to ask the Minister this: MOM's data on under-employment refers to one that is time-based under-employment. When engaging many young PMEs with diploma as well as degree and above qualifications, anecdotally, the concerns are more on non time-based under-employment. I wish to ask the Minister whether his Ministry could consider doing a more detailed study or survey to understand whether non time-based under-employment is really an issue or the magnitude of it.

Mdm Speaker, I would like to thank Mr Patrick Tay for his question. Unemployment is a concern. Under-employment, as well. We look at them from various perspectives.

By and large, we find that about nine in 10 of our young graduates from the local Autonomous Universities are able to secure a job within six months. Be that as it may, one of our biggest concerns, and I have flagged this up previously, is the increasing proportion of people who are pursuing higher education and special degrees at private education institutions and also at overseas education institutions. We are not at the stage where it is quite as chronic as in some other countries I have cited before, such as Taiwan and Korea.

But looking at the profile of our population and the increasing access to these institutions, that is one big concern going forward. I would add that the concern is not about degrees not being important. The concern really is pursuing degrees from institutions which have less than desirable standards. In these cases, as I have mentioned earlier, you would run the greater risk of under-employment.

We are tracking the data carefully from different perspectives, and this is something that we are mindful of. We are taking steps to see how best to support our young

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Singaporeans with different education qualifications.