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What Are The Benefits And Hiring Grant Incentives For Hiring A Senior Worker In Singapore
Even as a country that prides itself on adhering to the principles of meritocracy, Singapore has had many discussions in recent times about workplace discrimination. There is talk that perhaps we are biased against race, against locals in favour of foreigners, and even against religion. But perhaps one of the biggest and most problematic types of bias which we are facing is that of age.
Local workers are frequently evaluated at least partly on the basis of their age. Common negative stereotypes about older employees include:
- They are less productive
- They are too set in their ways
- They have an inability to adapt to modern technology
There is also a tendency to glorify youth culture (admittedly there are shades of this in every generation), with people like Mark Zuckerberg saying outright that “young people are just smarter”.
In other words, if you are older, you are likely to be considered less capable, less able to adapt, and you are less likely to be accorded career opportunities and income progression.
This is becoming a bigger problem because the Singapore workforce is aging rapidly. Employees aged over 50 is our fastest growing demographic. In 2018, 1 in 4 of our resident workers were aged 55 or older, and this number is projected to increase by 55 per cent by 2030, where they will represent 40 per cent of the workforce.
Why is our workforce aging so fast?
We face two well-known and obvious demographic trends. Firstly, our people are living longer. In fact, Singapore topped the world in life expectancy in 2017 with an expected lifespan of 84.8 years. This was an increase of 8.7 years when compared to our life expectancy in 1990, which was 76.1 years.
Secondly, our younger folks are having fewer children. Singapore’s fertility rates are among the world’s lowest - 1.14 children per woman in 2018, down from about three in 1970. This is far below the replacement-level fertility rate of 2.1 per woman.
This brings about a multitude of problems, chief among them the fact that we have a dwindling workforce – not enough young workers entering to replace the retiring workers exiting.
So it stands to reason that our citizens have to stay in employment for longer, and senior workers are going to be of greater relevance.
Would senior workers like to continue working?
On the surface, this seems like a silly question to ask. Who could possibly wish to keep working even into their twilight years? Many younger employees are already yearning to stop working.
Yet research has shown that people who retire often suffer greatly in their psychological well-being, falling into depression from loneliness, boredom and generally losing a sense of purpose.
It is perhaps a matter of distinguishment. Work need not be synonymous with hardship. But if they enjoy their careers and find them meaningful, why would our senior citizens not like to work? As Stephen Hawking once said, “Work gives you meaning and purpose, and life is empty without it”.
Many individuals continue to stay actively engaged with their careers even into their sunset years. For an example, look to Uncle Jimmy, in his mid-70s, who still cheerfully sells traditional ice cream from his ice cream cart and famously gives out free ice-cream on his birthday.
What are the advantages of hiring mature workers?
There is little doubt that workplace wisdom corresponds with age. It stands to reason that the more senior members of the workforce have a greater understanding of the business, as well as working life in general. They have built up more knowledge and expertise. They have had more time to amass people skills, especially those from the bygone era of predominantly face-to-face communication where impersonal emails and text messages did not exist. There is much of their experience which can be imparted to more junior staff.
Older workers also offer stability and dedication, which can help to temper the more tempestuous inclinations of younger workers. This stability and dedication often translate to a better work ethic as well. Research has shown that mature employee are often more punctual and take greater pride in doing a good job.
Moreover, besides drawing on the vast experience of senior workers, companies can also benefit from hiring senior workers by tapping on Government grants and programmes that are inclined towards supporting and increasing the employability of matured employees:
The 5 Great Benefits Of Hiring A Senior Worker In Singapore
Senior Worker Support Package
More than aware of both the need to support mature workers (who are often the first to be retrenched during a recession) and to encourage companies to acknowledge the benefits these local workers bring to the workforce, the government has introduced budgetary measures such as the S$1.3 billion Senior Worker Support Package:
1. Senior Employment Credit
The Senior Employment Credit scheme helps employers with the transition to higher Retirement Age and Re-employment age through wage offsets. The SEC scheme also aims to increase the employability of and to encourage retention of senior Singaporean workers.
Employers that hire senior Singaporean workers aged 55 and above will receive wage subsidies in tiers according to the workers’ ages. Senior workers earning up to S$4,000 will be applicable for the wage offset, with the maximum wage offset targeted at senior workers earning S$3,000.
To find out how much your company is eligible for SEC, you can check using the SEC Calculator.
2. CPF Transition Offset Scheme
Due to the increase of CPF contribution rates in 2022, a one-year offset of 0.25 to 0.5% of wages will be provided for every Singaporean and Permanent Resident worker who are aged above 55 to 70. This will help companies to alleviate the rise in business costs from CPF contributions.
The offset will be calculated based on employees’ incomes paid up to the CPF salary ceiling of S$6,000 per month in 2022.
Currently, the CPF Contribution rates – including those from employers and employees – is 37 per cent for workers up to 55 years old. It drops progressively as the age band increases – 26 per cent for workers aged 55 to 60, 16.5 per cent for those aged 60 to 65, and 12.5 per cent for those beyond 65.
3. Senior Worker Early Adopter Grant and Part-Time Re-Employment Grant Updated as of 11/01/2021, *The SWEAG has been fully committed due to exceptionally keen interest from companies and am no longer accepting applicants*
Do you know that by implementing a higher internal retirement age and re-employment age ahead of time, and employers committing to provide part-time re-employment opportunities to senior workers, a company can claim up to S$375,000 worth of grants?
The new Senior Worker Early Adopter Grant provides support for companies that are willing and able to raise both their retirement age and re-employment age ahead of the national schedule.
The current statutory retirement age is 62 while re-employment age is 67. The first scheduled increase will take effect from 1st July 2022, when the respective ages will rise to 63 and 68, and gradually increase to 65 and 70 respectively by 2030.
Companies that raise the respective ages by 3 or more years above the prevailing statutory ages will receive S$5,000 per senior worker aged 60 and older from the Senior Worker Early Adopter Grant, capped at 50 workers.
In addition, a new Part Time Re-employment contract Grant has also been introduced to support companies that commit to restructure their work structures and processes to provide part time re-employment opportunities to senior workers who have requested for it.
Senior Worker Early Adopter Grant
- At least 1 Singaporean / Permanent Resident (PR) employee 60 years and above
- Increase retirement and re-employment age by 3 years. (Retirement age = 65 and Re-employment age = 70)
Part-Time Re-employment Contract Grant
- Offer Part-time Re-employment opportunities to senior workers upon their request.
Senior Worker Early Adopter Grant
S$5,000 per Singaporean/PR employee 60 years and above (up to S$250,000) for increasing retirement and re-employment ages by 3 years.
Part Time Re-employment Grant
S$2,500 per Singaporean/PR employee 60 years and above (up to S$125,000) for providing part-time re-employment opportunities to senior workers upon their request.
4. P-Max Programme for Older Worker (P MAX)
P-Max is a Place-and-Train Programme that aims to help SMEs to better recruit, train, manage and retain their newly-hired PMETs, through encouraging the adoption of progressive human resource practices within SMEs. This programme is administered by the Workforce Advancement Federation (WAF), which is appointed by Workforce Singapore (WSG).
The grant has been enhanced - P-Max for Older Worker - to allow eligible SMEs to claim up to S$10,000 for hiring Singaporeans aged 50 and above, and successfully retains the PMET for at least 6 months after attending the programme workshop and completes the online HR Toolkit. For Singapore PRs aged 50 and above, the P-Max grant is up to S$5,000.
For more information on the P-Max Grant and how to sign up, please click here.
5. Job Growth Incentive
The Job Growth Incentive (JGI) aims to promote local hires over the six months, from September 2020 to February 2021.
JGI alleviates some costs by providing salary support funding for SMEs that are thinking of hiring as the economy gradually picks up. SMEs that increase their local workforce between the stated timeline will receive one year of salary support from the Government for each new local hire. There must be an increase in overall local workforce size, and increase in local workforce size earning S$1,400 or more per month, compared to August 2020 local workforce.
For new local hires aged 40 and above, the government will co-fund up to 50% of the first S$5,000 of gross monthly wages.
Employers can use the JGI calculator to calculate their baseline and check their eligibility for JGI.
With the various Government support and grants available for hiring senior workers, companies not only get to hire more experienced senior workers, but are also able to alleviate some of their hiring costs through the above incentives.