Firms look to further support to address labour crunch, business transformation in Budget 2022

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SINGAPORE – Business and industry leaders are hoping for further support to address the labour and talent crunch as well as help in business transformation in the upcoming Budget.

While firms are generally cautiously optimistic about the operating environment in 2022, concerns over rising costs and manpower challenges remain.

These sentiments were shared at the 13th Institute of Singapore Chartered Accountants (ISCA) Pre-Budget roundtable on Friday (Jan 14), which centred on the theme of recovery and refocusing on growth.

Key issues such as advancing digital transformation, the push towards sustainability, capability and talent development as well as driving internationalisation were discussed ahead of Budget 2022, which will be unveiled on Feb 18.

Mr Liang Eng Hwa, chairman of the Government Parliamentary Committee for Finance and Trade and Industry, noted in his opening speech at the roundtable that in 2022, Singapore needs to look beyond managing the Covid-19 pandemic to prepare for structural shifts such as continued digitalisation, climate change and changes in the global order.

“We need to built a more vibrant and more resilient economy that can meet the challenges of the future and seize new opportunities,” he said.

Singapore has to press on with its transformation efforts and support the local small and medium-sized enterprises (SMEs), added Mr Liang, who co-chaired the roundtable.

At the session, which was held in a hybrid format at ISCA House, panellists highlighted the continued challenges of high labour demand and the lack of talent with required skills, which has been exacerbated by the Covid-19 pandemic and border restrictions.

SMEs are at a disadvantage when competing for IT talent, given that they are up against multinational corporations and large tech firms, noted Singapore Business Federation’s (SBF) chief executive Lam Yi Young.

Singapore Manufacturing Federation secretary-general Lawrence Pek called for government funding to send young locals abroad on internships, where they could pick up new skills to meet the demands of emerging industry trends, such as in the areas of alternative protein and plant-based meat technologies.

Mr Ang Yuit, vice-president of the Association of Small and Medium Enterprises, suggested that talent development could be incentivised for SMEs by making it a criterion for government procurement projects.

At the same time, he raised concerns about the consolidation of some government contracts, which would make them more difficult for SMEs to compete for. Such projects can be integral to helping SMEs grow and eventually scale up to expand abroad, Mr Ang said.

Institute of Human Resource Professionals chief executive Mayank Parekh highlighted the importance of having both employers and employees on the same page about skills training, to ensure that staff are getting training in the skills that are required and prevent a possible skills mismatch.

He also pointed out that beyond technical skills, there needs to be support to help people adapt to the digital future, by picking up process skills such as in project management.

Similarly, SGTech honorary treasurer Ivan Chang pointed to the need for holistic transformation, noting that Singapore has done a good job of getting people and businesses to adopt digitalisation through various policies and support schemes. The next step would be to help firms identify ways in which they could transform their business models in line with industry trends and shifts, he said.

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