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Did you know that around 1 in 4 of our resident workers is aged 55 and older as of 2020? Hailed as one of the most developed countries in the world, Singapore is widely known for its quality healthcare and living conditions, leading to an average life expectancy of 83.6 years according to statistics in 2020.
How Does This Affect our Labour Supply?
Despite our increased longevity, our declining birth-rates and slower population growth have also caused shifts in the natures of our labour force and supply.
What does the term labour force mean? It refers to people who are currently employed or are actively seeking and available for employment. These individuals make up our Labour Force Participation Rate (LFPR), which constitutes our labour supply. Consequently, when LFPR falls, it means that fewer people are working or actively looking for work, thus resulting in a reduction of our labour supply.
The lower birth-rates and slower population growth mean that increasingly fewer young workers are entering the labour force as compared to the past. Eventually, the limited numbers of prime-working age adults will not be sufficient to offset the number of older persons exiting the labour force, resulting in a shrinking labour supply.
The effects of a shrinking labour supply have already started to set in. While there had been an overall steady growth in the LFPR from 2010 to 2015, the subsequent years saw a slight fall in the LFPR, with lower percentages from 2016 to 2018. Thankfully, the LFPR rate saw an increase in subsequent years again, in part due to the new initiatives that were rolled out.
Our Changing Employment Landscape
With persons aged 55 and older taking up an increasing share in our labour force, companies and individuals need to adapt to the changing employment landscape.
The growth of our resident labour force is expected to slow down, but this presents more opportunities to continue honing the skills of older workers, who possess a wealth of experience that younger, inexperienced workers can benefit from. The extension of re-employment age from 65 to 67 is an acknowledgement that workers can remain immensely valuable members of the workforce even as they age. Likewise, companies can make use of initiatives such as the Special Employment Credit, WorkPro Age Management Grant, and Job Redesign Grant to tap on the rich resources that our aged workers can provide.
Older works are a crucial solution to the increasing strain that we will face in our labour supply. With that in mind, it is thus important to move towards a more inclusive workforce that recognises the importance of learning from and growing alongside our ageing population.
Updated on: 17 August 2021