SDP claims NTUC’s Returner Work Trial copied them. True or false?

TL;DR – One’s better than the other.

The Singapore Democratic Party (SDP) claimed that NTUC’s Returner Work Trial is a modified version of a proposal they introduced in 2010.

Let’s look at the two schemes.

NTUC’s Returners Work Trial aims to get Professionals, Managers, Engineers, Technicians (PMETs) back to work.

The key features are:

  1. Duration is capped at 6 months
  2. Employers will offer structured on-the-job training to the returner
  3. Returners receives a minimum training allowance of $2,500. This training allowance is co-contributed by Workforce Singapore and the employer. Workforce Singapore will contribute $1,500 a month, while the employer will contribute $1,000 a month.
  4. An additional one-off retention bonus of $3,000 is given to any employer who employs and retains a returner, in a permanent position or a contract position of 12 months or above, for at least 3 continuous months’ after the completion of Work Trial. This retention bonus will be given to the employer at the 9th month mark after the commencement of the Work Trial, regardless of the time the returner was placed.

 

Compare this with SDP’s RESTART (Re-Employment Scheme and Temporary Assistance for the ReTrenched) programme where retrenched workers will receive:

  1. 75% of last drawn salary (capped at median wage) for first six months
  2. 50% for the second six months if still unemployed
  3. 25% for the third six months if still unemployed

The payout period is capped at 18 months and MOM will help match retrenched individuals with jobs. The job-seekers can only reject up to three job offers.

Let’s explain the two fundamental differences between SDP’s programme and NTUC’s Returner Work Trial.

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SDP’s programme will be a bigger drain on Singapore’s financial resources

SDP’s programme is very generous. It provides 75% of the last drawn salary, capped at the median wage.

The median wage in Singapore in 2016 is $4,056. That means a retrenched worker could possible get $3,042 for six months, and $2,028. A total of 13,730 workers were laid off in the first nine months of 2016. SDP’s programme could therefore potentially cost Singapore close to $70 million a year.

In contrast, even if we assume that all the workers who have been laid off are on NTUC’s programme, it would only cost Singapore about $21 million a year. So it’s clear that SDP’s programme is a far bigger drain on Singapore’s financial resources than NTUC’s programme.

But it’s not just that SDP’s programme costs more. It’s less effective.

A person has better chance of getting a job with NTUC’s programme

Why would a PMET be retrenched in the first place?

Probably because the economy is bad. Or because the person’s skills are not relevant to the economy. With SDP’s proposal, the PMET is trying to find a job with the same skills, in the same industry. How would the PMET stand a chance in finding a new job in the same industry?

If the PMET wants to change industry, without the relevant skills, what’s the likelihood that another employer would employ that PMET? And even if the PMET is able to pick up some skills in that 18 months, would an employer take the risk of hiring someone without experience?

Not likely.

So at the end of 18 months, that PMET would likely still remain unemployed.

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In contrast, NTUC’s programme helps the PMET get on the job training. This does two things. Firstly, this helps the PMET get new skills that would be more relevant to economy. Secondly, this helps the PMET get industry experience.

How can NTUC’s programme do this when SDP’s can’t?

An employer might think that it’s a risk to employ someone without the relevant skills and experience. NTUC’s programme provides the wage support, thus reducing the risk to the employer.

Also, NTUC’s programme also provides an incentive to the employer if the retains the PMET after the work trial period.

These, together with the structured on-the-job training of the programme, mean that NTUC’s programme will have a far better chance of getting the PMET into a permanent job than SDP’s programme.

But there can be improvements to NTUC’s scheme

So it’s clear that NTUC’s programme is likely to be more effective while costing less compared to SDP’s proposed programme. However, SDP did raise a valid concern. Currently, a PMET can only be on NTUC’s programme if they have been unemployed for more than two years.

It might be difficult for a PMET to survive for two years without a job. It would be good if the government can consider reducing the period that a PMET is unemployed before they can qualify for the Returner Work Trial.

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Another concern (but this one wasn’t raised by SDP) is whether six months is enough for the PMET to pick up the skills and experience needed to be proficient in the new job so that the company would be willing to retain him/her. NTUC and MOM should monitor the rollout of the programme and get feedback from PMETs and employers on the programme. Then, based on those observations, NTUC and MOM should consider if there is a need to lengthen the period of the work trial.

Good start, keep improving

NTUC’s programme is, in our opinion, a better thought-out programme.

It’s a good start.

But with anything in this age of rapid changes, the people implementing NTUC’s programme need to be agile. They need to gather and analyse data fast, and iterate and improve the programme rapidly. If they can do that, then this programme would certainly be useful in getting unemployed PMETs back to work quickly.
 



Author: CRC

Working on a startup is a scary crazy process. To destress, I write random stuff.


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