A DAY after the Government sprang its surprise of a cash grant to help employers retain local workers, one firm told Today it would rethink its retrenchment plans — while another plans to pass the money on to staff in some way.
A local small-and-medium enterprise (SME) in the graphics industry said it will “reconsider” axing jobs after the Chinese New Year. The Jobs Credit scheme, where the Government will reimburse employers 12 per cent of the first $2,500 of a local employee’s monthly pay, “will go a long way to ease the pressures”, a spokesman said.
But, he added, if the economy deteriorates further, the firm may have “no choice”.
Most employers Today spoke to said they would digest the Budget 2009 measures — the key aim of which is to save jobs — and review plans after the festive break.
It could be premature, however, for employees to hope their companies will roll back cost-cutting measures already in place.
Labour economist Chew Soon Beng explained: “With this new scheme, (firms) may not retrench because they have an extra plan. But if they have implemented a plan for workers to share work so they can take no-pay leave, they may continue with it because you never know what is going to happen next year.”
Workers would understand if they do not see any immediate trickle-down effects of the Jobs Credit scheme, some unionists felt.
“They know that this helpline is for the company,” said Mr Francis Lim, president of the United Workers Electronic & Electrical Industry. “If orders don’t come in, the company will still have to close down or lay off. The Budget will help cushion the low demand” and, hopefully, lead companies that want to retrench to do it later instead of sooner, he added.
But at least one employer is enthused about passing on at least part of the Government’s grant for businesses to its staff.
Chief executive of IT-company Seasami Goup, Ong Teck Soon, said that while he would not revise base salaries, employees “will be rewarded” through the monthly variable component that makes up one-third of their total earnings.
If the company’s bottomline shows growth after costs and revenue have been accounted for, employees could enjoy a higher pay as soon as April, he said.
The Government will distribute the first of four quarterly Jobs Credit payments at the end of March. And with this “very imminent” cash injection in sight, companies will “definitely review cost cutting measures”, said Mr Koh Juan Kiat, executive director of the Singapore National Employers’ Federation.
It could take one to two weeks for employers to review the scheme’s actual impact, which would be more significant for some, depending on the type of worker and his wages, said Mr Koh.
SMEs will likely “sit down and review their salary structure”, said president of the Association of Small and Medium Entreprises Lawrence Leow. If a company has 10 employees drawing $2,500 a month, it could save $3,000 a month – that’s the equivalent of one job, he added.
And while most companies are trying their best to retain headcount, at least one company has made expansion plans. Ms May Foo, vice president for human resources at Apex-Pal, said the company could use the funds from the cash grant to hire more staff for its new Sakae Sushi outlets.
In a statement on Friday, the National Trades Union Congress termed the $20.5 billion Resilience Package, and the decision to draw on the nation’s reserves for the first time to fund the $4.5-billion Job Credit Scheme, “bold” and “decisive”.
It will have a “significant impact on workers, companies and our economy”, said the NTUC.
- TODAY newspaper
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