Singapore’s trilateralism put to the test: Finding balance amid business turmoil
In a world where industries such as e-commerce and ride-sharing are characterized by rapid successes as well as rapid downturns, Singapore’s long-established tripartite model is facing unprecedented challenges. The workforce is in a precarious position as companies grapple with the need to grow rapidly and downsize just as quickly.
The accelerated business life cycle that characterizes today’s fast-paced economy has created job insecurity. In their pursuit of growth, companies often rely on a “hire quickly, scale quickly, and reduce headcount” model during market fluctuations. This trend was most evident in 2023, when the number of layoffs in Singapore soared to a staggering 14,320, more than double the number from the previous year.
Despite the decline in the last quarter, this trend suggests that sector-specific challenges may persist into 2024. The National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF) recognize the need for increased support for employees transitioning to new workplaces. Further job cuts are expected next year.
Request for legally mandated severance pay
Instead of accepting job insecurity as an inevitable consequence of economic change, some are calling for severance pay to be legislated. The move aims to promote a more balanced approach to business successes and failures and ensure fair treatment for laid-off employees.
The proposed guidelines aim to complement, rather than replace, existing frameworks. They emphasize the importance of open communication between employers and employees, early intervention to avoid layoffs, and assistance in finding new jobs for affected workers.
Securing Singapore’s future
The tripartite relationship between government, employers and employees has long been the cornerstone of Singapore’s economic success. However, changing business profiles and technological advances require a re-evaluation of this model.
By legislating severance pay, Singapore can secure its future by promoting a more stable workforce and fostering trust between employers and employees. This approach not only benefits those directly affected by unemployment, but also contributes to the resilience and sustainability of the economy as a whole.
As we move into an increasingly unpredictable business environment, prioritizing the health of your employees is critical. Addressing the challenges posed by accelerated business life cycles can ensure that Singapore’s tripartite model continues to serve as a beacon of balance and equity in the global economy.
The sharp rise in layoffs in 2023, reaching 14,320 jobs, served as a stark reminder of the need for change. With further job cuts expected in 2024, now is the time to act. Legislating severance pay can shape better business outcomes and protect the future of Singapore’s workforce.