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COVID-19: Upskill To Safeguard Singapore’s Economy

As the impact of the COVID-19 outbreak deepens, Singapore is projected to face its worst economic contraction yet, since the global financial crisis in 2009[1]. Resultantly, the Singapore government passed a Resilience Budget at S$48billion to help cushion the blow on the country’s critical industries. This stimulus package came on top of the S$6.4 billion-worth 2020 Budget that was already announced earlier[2]. One of its key priorities for the stimulus package is to safeguard the livelihood of its national workforce.

As stronger finances are being put towards shoring up the economy in the face of a prolonged malaise, it is also critical for the nation to examine gaps and opportunities in its current manpower development and upskilling programmes to continually protect its workforce and economy.

A re-emphasis on reskilling

Prior to COVID-19, mature workers are already facing ongoing uncertainties and changes in their respective industries caused by Industry 4.0 technologies. Younger workers, at the same time, are also finding themselves facing an increased threat of long-term unemployment during such uncertain times.

With the onslaught of the coronavirus outbreak, more businesses are downsizing staff strengths to make ends meet. On a national level, Singapore’s unemployment is likely to rise beyond the relatively low levels of recent years[3].

To reverse this trend, efforts must go towards helping workers to be open to and secure opportunities for reskilling to ensure continual employability. One of the ways is to look towards Europe for clues on an ideal economic and reskilling model that the country could potentially adopt.

An example is the Danish model of "flexicurity"[4], which encourages employers to restructure during downturns while providing unemployment benefits to affected workers. The consensus among the firms, workers and the Danish government is that firms that need to restructure will not hesitate to fire workers, but the workers themselves are not severely affected as they get to undergo retraining and receive unemployment benefits from the state for up to two years, at a maximum rate of around S$770 a week in 2018.

Through this approach, government support in the form of a transitory income paid directly to trainees may help reduce hesitancy and taxes associated with the loss of income. This also complements Singapore’s Adapt and Grow scheme where wage subsidies are given to employers only after they hire prospective employees, while they wait for training to be completed. Such income support would go further than the one-off Job Credit Scheme which the Singapore government had implemented in 2009, giving businesses cash grants to encourage them to preserve jobs in a downturn.

Future benefits outweigh upfront costs

With more than one-third of the Resilience Budget[5] dedicated to saving jobs and supporting workers, Singapore has shown that it is doubling down efforts to ensure job security for its workforce.

For instance, it will increase its co-funding of wages for local workers from 8 per cent to 25 percent. Sectors that are harder hit by COVID-19 will receive higher support in wages – 50 per cent for food services and 75 per cent for the most affected aviation and tourism industries.

At the same time, self-employed workers will receive direct cash assistance through a new Self-Employed Person Income Relief Scheme (SIRS). The government will also extend training support scheme for them until December 2020, while increasing the hourly training allowance to S$10 from May 1.

For the jobseekers, there will also be two new initiatives – the SGUnited Traineeships programme and the SGUnited Jobs Initiative – that aim to create about 10,000 jobs over the next one year.

While the process of evolving Singapore’s current manpower support systems is not without its challenges and costs, such efforts can greatly improve long-term workforce readiness during economic downturns. It can also mitigate an extended recovery following any unforeseen impact exerted upon economic conditions such as the likes of COVID-19 outbreak.


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