Ong Ye Kung: SkillsFuture Credits should watch economic activities to focus efforts to help workers pick up skills

Minister for Education (Higher Education and Skills) Ong Ye Kung said Singapore should prioritise where are the economic activities, which sectors, which companies are hiring and then put very focused efforts to help workers pick up the skills so that they can take up the new jobs, in relation of the country’s effort to upskill employees and use of SkillsFuture Credits to train for alternative careers.

Member of Parliament for West Coast GRC and Chairman of the Parliament Estimates Committee, Ms Foo Mee Har had asked the Minister for Education (Higher Education and Skills) Ong Ye Kung at the 13th parliamentary session:

  1. What is the progress made by Singapore companies’ investment in skills training to support skills mastery and employees’ transition to new growth areas in their respective companies;
  2. How do the training efforts of Singapore companies compare with the best-in-class globally in terms of training hours, dollars spend as a percentage of payroll, and track record in supporting employees to gain new skills.
  3. Whether the Government tracks the utilisation of SkillsFuture credits to prepare Singaporeans for alternative careers and how successful the scheme has been in preparing Singaporeans for new jobs especially amongst older workers.

Mr Ong had answered that historically, the adult workers’ training system tended to support employers training their workers, much more than empowering workers to take charge of their own lifelong learning journey.

“10 years ago, Government funding for lifelong learning was heavily weighted towards employer-supported training, with a small proportion going to individual-initiated training. Over the years, the Government has expanded its funding support for lifelong learning, and also shifted funding more towards supporting individuals directly,” Mr Ong said.

However, given the increase in number of contract workers and freelancers, it is more likely that individuals will take the initiative to prepare themselves for their next careers, as opposed to expecting employers doing so for them.

Mr Ong explained at present the Ministry of Education (MOE) and SkillsFuture Singapore (SSG) provide about $400 million a year in direct training subsidies for lifelong learning, with 40 percent going towards supporting individual-initiated training. 60 percent still goes towards supporting companies and employers to train their workers.

“Employed Singaporeans’ participation rate in structured training is now 62 percent, higher than the OECD average of 55 percent. We are higher than Australia, Korea, Japan and France, but we are below US, the UK, Finland and Sweden,” Mr Ong said.

“Based on our surveys in 2014, 82 percent of surveyed employers provided structured training to their employees, compared to 72 percent in 2006. We are therefore not doing badly by international standards, and many companies do take the skills upgrading of their workers very seriously,” he said.

But Singapore can certainly do better, Mr Ong said, especially in encouraging SMEs to do so, and for all companies to be more active in offering structured in-house training and apprenticeship schemes, such Enhanced Internships under SkillsFuture, the SkillsFuture Earn and Learn Programme, and the Professional Conversion Programmes under Adapt and Grow. All these are under the SkillsFuture movement.

“The SkillsFuture Credit is one small important scheme… it is one of many efforts to under the SkillsFuture movement to promote lifelong learning.”

“We track the utilisation closely …  at end December 2016, over 126,000 Singapore Citizens have utilised $37 million worth of the SkillsFuture Credit,” Mr Ong stated.

Thanking the Minister for his comprehensive response, Ms Foo then asked two supplementary questions, asking if the Minister would consider requiring companies to set specific funds towards training, for example, having a target of 2 percent of payroll towards training which some countries do and whether could the Government prioritise SkillsFuture efforts towards very targeted schemes to get new jobs and building new skills.

Ms Foo elaborated that such targeted schemes could help Singaporeans build new skills necessary for new jobs and prepare for alternative careers by providing differentiated funding and extensive internships opportunities, as well as place and train schemes. Whilst there are other things important but prioritise towards getting new skills for new jobs.

Mr Ong replied that the Government does have something similar. “Under Skills Development Levy, every company set aside 0.25 percent of their payroll for workers up to $4,500 in salary. They pay towards today’s SkillsFuture Singapore. That money is pooled together which they can then claim for the training of their workers.”

“So, in a way, that mechanism is in place. It is levied very lightly at 0.25 percent but I think we will be very careful not to add further burden,” he said.

As for prioritising efforts towards targeted schemes, Mr Ong responded positively, “What I think we should really do is what the Member suggested in her second question – prioritise where are the economic activities, which sectors, which companies are hiring and then put very focused efforts to help workers pick up the skills so that they can take up the new jobs. That is exactly what we are doing together with the Ministry of Manpower.”