Singapore National Day Rally 2015 - through the eyes of the HR Professional.
In the National Day Rally 2015, amongst a number of family-friendly measures, there were two items that stood out in Prime Minister Lee Hsien Loong's speech that are likely to be of particular interest to HR practitioners - the announcement that re-employment will be extended to age 67 in 2017 and the increase in paternity leave this year. We have summarized the changes below as well as considering the next steps for employers.
- Re-employment to age 67
Given the tight employment situation in Singapore, the ageing of the Singapore workforce, and the success of the re-employment legislation that came into force in 2012, the increase in re-employment legislation to age 67 was widely expected - however the Prime Minister's speech confirmed implementation in 2017.
Full details of how the revised re-employment legislation will operate are yet to be released. However employers should factor this potential change into their planning. In terms of re-employment to age 65, Towers Watson pulse survey data suggested that the most common re-employment contract was a 1-year rolling basis - and this more flexible approach may continue to be preferred by employers. The pulse survey also suggested that it was most common for employees to be re-employed at the same salary and on the same benefits.
- Increased paternity leave
Singapore continues to have one of the lowest fertility rates in the region (only 1.25 births per female in 2014 according to Singapore Department of Statistics). Besides monetary measures - such as enhancing the Baby Bonus scheme and increasing the Government grant to new borns' CPF Medisave accounts - the Prime Minister announced an increase in paternity leave from one to two weeks. This supports a broader Government campaign highlighting the importance of fathers in bringing up children. The Government will fund the additional leave (subject to a cap) - which applies in respect of births of children who are Singapore citizens.
- Next steps
Re-employment ready? Organisations should review the benefits they offer, particularly as the cost of medical cover and life insurance increases significantly at the older ages. Employers should understand what the impact of re-employment will be for their insurance plans - in terms of both cost as well as underwriting considerations. In addition, employers will need to consider the potential impact of the new legislation in terms of workforce planning, succession and talent management.
Adopt new paternity? The new paternity leave provision takes immediate effect - from 1 January 2015. However the new provision is voluntary at this stage, giving employers time to factor the new leave into their plans. Employers may wish to consider equity of paternity provision across employee groups. Any change in policy should be clearly communicated to employees.
We hope the above is helpful. We would be happy to connect more on the above if you require further assistance.
Towers Watson