Social Issues on Singapore Aging Workforce

Singapore faces the demographic challenge of an aging population. As population is closely linked to the workforce, we will expect an aging work force with a higher ratio of senior workers. In this essay, we will discuss the social issue of an aging work force together with the interventions in place.

As a result of Singapores declining fertility rate, the young citizens entering the workforce are less than enough to replace the increasing senior citizens retiring from it. One implication would be a shrinking work force, which will have adverse impacts on Singapores productivity and economy growth. This issue was highlighted in the recent Population White Paper (National Population and Talent Division, 2013). As the root of the problem lies in the aging population, the Singapore government has been investing in efforts and initiatives to raise fertility rate of Singaporeans, through schemes such as the marriage and parenthood package (Cheam, 2013), and the involvement of key stakeholders. Met with mixed success, the effect of the governments push for higher birth rate on the nations productivity and economy growth will only be evident after the children grow up. This takes time, and rising the retirement age provides a temporary buffer against a shrinking workforce by keeping senior workers in employment for a longer period of time. The implication is an aging workforce. This would not serve as a long-term solution as there is a limit to how long we can extend the employment period and an aging work force can be a social problem by itself.

We must understand that an aging workforce is also a trend that arises due to many different factors. It is not uncommon to see seniors working beyond the stipulated retirement age of 62. People are living not just longer, but with better health too (Committee on Ageing Issues, 2006). For the lower wages group of people, longer life expectancy will imply that the individual will need more saving to support oneself after retirement, which calls for longer employment for as long as ones health permits. There are also increasing singles (Department of Statistics, 2011), with a sizable proportion of whose have to continue to work beyond retirement as they have little savings and no children to support them. Thus it is important for Singapore to manage the trend by addressing the issues that an aging workforce may face, if we hope to utilities on the aging workforce as one of our temporary solutions toward a shrinking workforce.

One issue that senior workers faced is age discrimination from employers (Heng, 2013). Due to the seniority-based wages system, the employer is expected to pay more for senior workers. Coupled with the perception of senior workers being physically weak and less energetic, most employers would prefer to hire a younger worker rather than a senior worker. As a result, a number of seniors in Singapore might face difficulties in staying in employment.

Singapore approaches the issue of age discrimination by legislating a stimulated retirement age to prevent dismissal of employees on the ground of old

age. In the original Retirement Age Act, the minimal retirement age is 62 years old, such that employers cannot retire an employee until he or she reaches the age of 62. Singapore faces an aging population and needs to retain older workers in the employment for an increased period of time. In view of this, the Retirement Age Act was reviewed and replaced by the Retirement and Re-employment Act in 2012. Under the Retirement and Re-employment Act (Ministry of Manpower, 2012), employee have to offer medically fit senior workers, who are having satisfactory work performance a re-employment contract when they reach 62. The re-employment contract should include adjustment on the senior workers salary and job scope, such that salary of these senior workers will not be too much of a burden to the employer and the job can be restructured to meet the need of the senior workers in view of their changing lifestyle and physical decline. The current Act mandates reemployment of eligible senior workers until the age of 65, and there is ongoing plan to extend the re-employment period till 67, in response to the aging population. The government has opted for re-employment over simply extending the retirement age, as the government believes that this approach will provide for more flexibility to meet the needs of both employers and employees.

We see that this policy is mainly targeted towards employee to get them to retain senior workers, through the use of legislation. A possible issue with legislation is that employers themselves may not be motivated to take part in the change, and find ways to bypass the process. Eligibility for the Retirement and Re-employment Act depends on the senior workers medical status and performance, and the performance is determined by the employee. Employees who are not so keen with the idea of re-employing senior workers may set the criteria for re-employment high

to deter re-employment and enforcement of the Act is not stated out clearly. Employees who do not see value in re-employing senior workers may offer salary that is too little in proportion to the work load. Thus the enforcement under the Retirement and Re-employment Act is not very clear, and one may question whether the Act really can help seniors to stay in employment. Even for employees who are not against re-employment of senior workers, the work environment may be designed primarily for younger workers in mind, and by evaluating the senior workers using this benchmark, they would be placed to a disadvantage in the evaluation of their work performance because of age-related physical decline.

At the end of the day, it boils down to the mindset of employees, and it is important to engage employees to change their perception of their senior workers and be supportive of the aging work force. Employees need to understand that while senior workers may face physical decline, they possess wisdom and experience that cannot be found in younger workers, and these wisdoms and experience are valuable resources to tap on to increase productivity and efficiency. If employees are able to re-design the job scope and work environment by making the job itself elderfriendly, these senior workers may become as productive as or even more so than younger workers. However, changing perception of senior workers is a long term process, which requires continuously engagement with the key stakeholders. This is a major component in the governments initiative to promote active aging in Singapore, supported by other organizations, such as the Council of Third Age. The Council of Third Age has been in the forefront of the active aging movement, and several of its initiations gear towards changing employers perception of senior workers, through studies, conferences and even giving recognitions to employees

who actively employ and retain older workers (Council of Third Age, 2013). As long as employees see value in senior workers, the process of keeping senior workers in employment will be a lot easier, and legislation may not even be necessary. However for now, the Retirement and Re-employment Act may seem to be a more direct and effective way to get employers to keep senior workers in employment.

The Retirement and Re-employment Act targets the employers to keep senior workers in employment. Another issue of concern is whether senior workers themselves are open to the adjustment in salary and job scope. In terms of salary, employers want affordable cost of employment as well as productivity and efficiency from the senior workers. The Retirement and Re-employment Act helps the employers to negotiate an adjustment in salary structure, and the process is facilitated by guidelines from the tripartite partners (MOM, NTUC & SNEF). For example, an agreement can be made between the employer and employee for the salary to stay stagnant, or the work load on the employee can be lightened in exchange of a lower salary. Although the guidelines state that the adjusted salary should remain appropriate for the job, senior workers have to be open to the idea of not leveraging on their seniority but settling for lower than expected wages in order to stay in employment. While this can be a tough choice and the decision will vary from individual to individual based on circumstances, the pursuit of financial success tends to become less important over other goals as a person ages. A senior worker may want to have more time to spend with their family or to pursue their own interest. Thus the restructuring of the job has to take into consideration of senior workers priorities. For example, flexible hours can be introduced so that senior workers can still spend time with their family while staying employed. Perception of

aging is important when it comes to deciding whether to continue employment at old age. Senior workers have to continue seeing themselves as active members of the society. While the Retirement and Re-employment Act is implemented for the primary intention of keeping senior workers in employment, it should not be seen as an independent intervention by the government, but in the context of other schemes and initiatives as well. There are several schemes that support the Retirement and Reemployment Act. One of which is the CPF scheme, as CPF contribution for employee decreases progressively after they reach the age of 50 (Central Provident Fund Board, 2013). Salary adjustment can be to make in view of the drop in CPF contribution, so as to allow employers to pay less but the employee to continue to enjoy a satisfactory salary due to the larger amount of cash payout. Another scheme is the ADVANTAGE! Scheme administered by the WDA to fund the re-structuring of job scope and work setting to suit the needs of the senior workers (Singapore Workforce Development Agency, 2013).

The Retirement and Re-employment Act is an intervention that provides employment opportunity for senior workers through salary adjustment and job restructuring by legalising the procedure. However, there is a limit to how far legalisation can go. How about workers beyond the age of re-employment? It is up to employers whether they want to utilize the senior workers and up to the senior workers whether they are open to the adjustments and stay in employment. This boils down to mindset and perception of the aging work force. A good example that Singapore can refer to is Japan, in which their senior workers were treated with

dignity and respect. The Active Aging Movement is a timely initiative to shift the publics perception, beliefs and values to fit into the aging work force, and should remain as the main driver to keep senior workers in employment supported by the Retirement and Re-employment Act for more immediate and direct effect. References Central Provident Fund Board. (2012). CPF Contribution. Retrieved March 27, 2013, from http://mycpf.cpf.gov.sg/Members/Gen-Info/Con-Rates/ContriRA. Cheam, J. (2013, January 21). Government releases new measures to promote marriage and parenthood. The Straits Times. Retrieved March 27, 2013, from http://www.straitstimes.com/breaking-news/singapore/story/governmentreleases-new-measures-promote-marriage-and-parenthood-20130. Committee on Ageing Issues. (2006). Report on the ageing population. Retrieved March 27, from http://app1.mcys.gov.sg/Portals/0/Summary/research/CAI_report.pdf. Council of Third Age. (N.D). Optimism on Senior Employability. Retrieved March 27, 2013, from http://www.c3a.org.sg/focus-areas/optimism-on-senioremployability. Department of Statistics. (2011). Singapore Census of Population 2010 : Statistical Release 1: Demographic Characteristics, Education, Language and Religion . Retrieved March 27, from http://www.singstat.gov.sg/publications/publications_and_papers/cop2010/cen sus_2010_release1/cop2010sr1.pdf.

Heng, J. (2013, March 8). Age discrimination leaves older workers vulnerable. The Straits Times. Retrived March 27, 2013, from http://www.stjobs.sg/careerresources/job-seeking-guide/age-discrimination-leaves-older-workersvulnerable/a/108447. Ministry of Manpower. (2012). Retirement and Re-employment Act. Retrieved March 27, 2013, from http://www.mom.gov.sg/employment-practices/employmentrights-conditions/retirement/Pages/retirement.aspx. National Population and Talent Division. (2013). Population White Paper: A Sustainable Population for a Dynamic Singapore. Retrieved March 27, 2013, from http://www.population.sg/whitepaper/resource-files/notice-of-correction/. Singapore Workforce Development Agency. (N.D). ADVANTAGE!. Retrieved March 27, 2013, from http://www.wda.gov.sg/content/wdawebsite/programmes_and_initiatives/L223 A-AdvantageScheme.html.