Analyst warns HR departments to start preparing
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A new study suggests that over the next two decades, Singapore will be Asia’s biggest loser in tackling the region’s ageing labour force.
Published by Oxford Economics, the report stated that the nation faces a double whammy in its shrinking workforce and stunted growth in labour participation relative to its regional neighbors.
Nearly all Asian economies will face similar demographic challenges over the next 20 years. While some nations may look to augment their workforces by postponing mandatory retirement, reintegrating the already retired, or pushing for more women in the workforce, the report stated that there is little that these policy efforts can do to mitigate the damage in other countries.
In the region, Thailand and Japan seem well-equipped to handle the shift. Thailand will see a largely stagnant working population over the next decade, while Japan has made great strides in supplementing its shrinking population with more robust labour participation policies.
Singapore, on the other hand, will see its labour supply shrink by 1.7 percentage points before 2026, the report claimed. In the following decade, it will shrink even further by 2.5 percentage points, after accounting for changes to the participation rate.
Singapore is predicted to be the worst hit in the region.
Taiwan and South Korea ranked high up alongside the republic in terms of nations most vulnerable to these shifts and least able to offset its shrinking working population with efforts to increase labour participation.
This is due in large part to recent shifts in immigration policy, the report said.
Louis Kuijs, lead author of the report, warned: "With the demographic challenge looming on the horizon, Asian economies better start preparing."
