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How Singapore Budget 2025 doubles down on workforce transformation

Authors

  • Samir Bedi

    EY Asean People Consulting Leader; Singapore Government & Public Sector Leader, Ernst & Young Advisory Pte. Ltd.

  • Jia Yong Goh

    Partner, People Consulting, Ernst & Young Advisory Pte. Ltd.

5 minute read 04 Mar 2025
Related topics
Workforce
CHRO agenda

Maintaining workforce competitiveness remains key and fine-tuning the implementation of workforce measures is vital to their efficacy.

In brief

  • Upskilling remains a national priority as Singapore seeks to maintain its workforce competitiveness in a dynamic geopolitical and technological landscape. 
  • Budget 2025 provides opportunities for companies to tap into added support for their workforce transformation efforts. 
  • It also addresses the need to improve mature and senior workers’ career health and longevity.

Singapore’s journey to transform its workforce started in 2015 with the introduction of the nationwide SkillsFuture initiative. A decade on, upskilling remains a national priority. Budget 2025 announced several workforce transformation measures in a bid to sharpen the nation’s workforce competitiveness in an evolving geopolitical and technological landscape and enable individuals to forge meaningful career pathways.

While the policy aims are clear, successful implementation and adoption are crucial. With the upcoming committee of supply debates, we look forward to the details of operationalizing the proposed Budget measures in the hope that existing concerns can be adequately addressed.

Combine “what to” with “how to”

Job redesign remains a key tenet of industry and workforce transformation. 

Companies are best placed to continuously define — and redefine — how jobs should evolve as they press on with business transformation. The introduction of the SkillsFuture Workforce Development Grant and redesigned SkillsFuture Enterprise Credit scheme, coupled with the expansion of NTUC’s Company Training Committee (CTC) Grant, will provide companies with added support for their workforce transformation efforts.

To meaningfully tap into these measures, small and medium-sized enterprises (SMEs) often require guidance on determining the jobs that would need to be created and redesigned and how to do so. A way to address this is to expand the Jobs Transformation Maps (JTMs) that have been rolled out for various key industries. Currently, the JTMs detail how jobs and skills are expected to evolve in the specified industries. Potentially, the JTMs could be expanded to cover a broader set of industries, such as manufacturing, maritime and aerospace. Also, the JTMs could delve into the impact of technology, artificial intelligence and sustainability on future jobs and skills.

Expanding the JTMs could help address SMEs’ need for guidance on determining the jobs that would need to be created and redesigned and how to do so.

Involving the wider ecosystem could help drive a more robust approach to supporting job redesign and upskilling. To this end, institutes of higher learning could partner with SMEs more closely to develop learning programs that help individuals acquire fit-for-purpose industry skills. Trade associations and chambers could also play a crucial intermediary role to aggregate upskilling demands and bridge the knowledge gaps of SMEs.

It is also worthwhile to consider introducing a Chief Human Resource Officer-as-a-Service (CHRO-as-a-Service) scheme — similar to the Chief Technology Officer-as-a-Service scheme by the Infocomm Media Development Authority. Just as how the latter helps SMEs identify and utilize digitalization resources based on their business needs, the CHRO-as-a-Service could facilitate access to industry HR expertise and leverage best practices to jump-start or accelerate their workforce transformation.

Streamline and simplify for speed

A common concern of SMEs when leveraging grants and schemes is the need to pay for the costs up front and seek reimbursement from the government subsequently. Despite recent streamlining efforts, SMEs may still have to wait for up to two months for reimbursement, which can be a significant financial burden for cash flow-constrained companies.

It is timely that the SkillsFuture Enterprise Credit will be redesigned to operate like an online wallet, allowing companies to use the credits to immediately offset out-of-pocket costs for eligible workforce transformation initiatives. Adopting a similar approach for all workforce transformation grants and schemes, including the CTC Grant, Career Conversion Programmes and newly announced SkillsFuture Workforce Development Grant, would be hugely beneficial in easing cash flow concerns.

Companies will need to review their technology and business processes in tandem with workforce initiatives. This means having to apply for separate grants, which adds to the labyrinth of administrative processes. Bundling the application for grants and schemes for workforce transformation with those for related technology and business process transformation in a single platform could improve efficiency for SMEs and approving agencies and help with the speed of implementation.

Improve career health and longevity

According to the Ministry of Manpower’s Labour Force in Singapore 2024 report, the median age of Singapore’s labor force in 2024 was 45 years and 62% of the labor force were above 40 years old. The career health of these mature (aged 40 to 49) and senior (aged 50 and above) workers is hence important to the longevity of the workforce and continued viability of Singapore’s economy.

Unsurprisingly, Budget 2025 made improving the employability of mature and senior workers a focus. Various initiatives point to the aim of enhancing the career health of this segment of workers. These include the SkillsFuture Jobseeker Support Scheme,  localized Jobs Placement Centres in all community development centers nationwide, extension and expansion of the Senior Employment Credit, and increase in central provident fund contribution rates for those aged above 55 to 65.

These announcements also complement measures announced in previous budgets, which cater for additional funding for upskilling and wage support for locals aged 40 and above, such as the SkillsFuture Level Up Programme and SkillsFuture Mid-Career Training Allowance.

How EY can Help

To give these measures a boost, it would be helpful to increase the SkillsFuture Mid-Career Training Allowance amount that learners can receive when they are on full-time or part-time training. These allowances, currently set at S$3,000 a month and S$300 a month for those on full-time training and part-time training respectively, may be considered low for experienced workers. This may have little influence in motivating them to embark on a true reboot of their skills to remain relevant in the future. 

 

Further, increasing the dependency ratio ceiling for companies that demonstrate a strong appetite to hire and upskill local mature and senior workers would encourage more organizations to adopt more age-friendly workplace practices. It would also help uplift the employability and livelihoods of mature and senior workers.

 

Re-skilling and upskilling are vital for SMEs and workers to develop future-ready capabilities that would allow them to thrive in the ever-evolving business environment. As the saying goes, “The devil is in the details.” It is with much excitement that we anticipate the details of the Budget 2025 proposals in the coming weeks and see the wheels of active adoption in motion.

 

This article was first featured in The Business Times on 4 March 2025.

Summary

Workforce transformation measures in the Budget 2025 announcement seek to sharpen Singapore’s workforce competitiveness and enable individuals to forge meaningful career pathways. Expanding the JTMs and involving the wider ecosystem could better support job redesign and upskilling. Adopting an approach similar to the redesigned SkillsFuture Enterprise Credit scheme for all workforce transformation grants and schemes would help ease cash flow concerns. Increasing the SkillsFuture Mid-Career Training Allowance amount and the dependency ratio ceiling for companies that strongly support the hiring and upskilling of local mature and senior workers could help improve their career health and longevity.

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    About this article

    Authors

    • Samir Bedi
      EY Asean People Consulting Leader; Singapore Government & Public Sector Leader, Ernst & Young Advisory Pte. Ltd.
    • Jia Yong Goh
      Partner, People Consulting, Ernst & Young Advisory Pte. Ltd.
    Related topics
    Workforce
    CHRO agenda

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