Saturday January 6, 2007; Pegs that fit many holes; STAR
Insight Down South: By SEAH CHIANG NEE
The changing global economy is forcing the young to enter the job market with multiple skills and face up to career flexibility. AFTER returning with a Master's in mass communications in Australia, Phyllis fretted as she shot off one job application letter after another. She had heard horror stories about the tough market here and worried that she would be unemployed for some time. To her surprise, she landed her first job within two weeks and discovered a career trend. Her job, however, had nothing to do with what she had expected when she first went to Melbourne six years earlier, which was journalism, advertising or public relations. She made it as a junior executive at a beach hotel on the flourishing island of Sentosa. What she and many Malaysians seeking jobs here have discovered in recent years is a growing disconnect between their university degrees and subsequent careers as a result of the changing global economy.
It merely follows the trend in the developed world as old businesses disappear, sometimes overnight, and new ones spring up, creating problems for graduates with an inflexible job expectation. My friend’s son who graduated in civil engineering from one of America’s top colleges, for example, is now teaching in a secondary school instead of working in construction. Lawyers have become journalists or musicians and doctors are now managers. An IT graduate I befriended is a professional photographer and a few trained biologists have done well in sales. Cases of people working in jobs unrelated to their training have become so common that interviewers have stopped asking candidates questions like: “Why should a trained scientist like you want to work as a junior executive with us?” In the past, parents used to send their children to study accountancy, law or engineering, the so-called secure careers, and see them move single-mindedly into these professions.
A doctor was then a doctor, a biologist generally worked in the lab and a civil engineer, more often then not, would end up wearing a hard hat – square pegs in square holes, so to speak. Scattered stories of graduates working outside their studies have been around for some time, but the numbers really took off around the mid or late-90s. The reason was two-fold: the large loss of industrial jobs to countries like China and India, and new economic demands that cause some jobs to disappear and others to flourish. People were also responding to Singapore’s own economic restructuring to move into higher technology and services that required retraining and reorganising of the labour market.
The economic downturns of Sept 11 (2001) and the SARS crisis (2003) caused large unemployment – and career dislocation. In the first half of 2001, for instance, four in 10 of the 9,000 people retrenched were executives and 16,500 tertiary-educated Singaporeans were jobless by September. This resulted in professionals having to move into new unrelated work. In the years ahead, multiple skills and career flexibility will be a fact of life as a result of further changes. Careers will blow hot and cold due to rising and falling demands. In some years, skills like IT, construction or accountancy would be in demand; in others, especially now, it would be personal banking, healthcare or teaching.
“Any professional sticking to one career choice or skill stands the chance of being left behind,” said an executive head-hunter. Whether working in Singapore or abroad, the ideal 21st Century graduate will be one who is anchored to one or two disciplines but who has also covered a spread of diverse elective courses. To its credit, before the world economy changed, the government argued that economic restructuring had to begin in education. Today, eight out of 10 Singaporean students get post-secondary education that is steadily moving into a multi-faceted approach. Firstly, it abandoned the old exam-oriented model and adopted a large part of the American system. The two biggest universities, National University of Singapore and Nanyang Technological Univer- sity, now allow students to pursue courses outside their immediate fields of specialisation.
This is filtering downwards to schools. By end-2007, upper secondary students in 40 schools will be offered 40-hour courses in five polytechnics. “We'll cover subjects like tourism services (accommodation, food and beverage, and tour planning), IT, Media and Design, Chemical and Life Sciences as well as Game Design,” an official explained. This will move to the pre-teens with the opening of Singapore’s first “primary school of the future” in 2008 (with 14 more by 2015) to prepare children for a life dominated by technology and information. “We want to teach children from young to be comfortable with the latest technology,” said a senior official. Increasingly, students will be offered a wider range of courses and electives, allowing school dropouts to have a better crack at a meaningful job.
Some special schools are moving into non-academic studies. A case in point is North Light School where students can be seen playing games on Xbox 360 consoles during classes. At Townsville Primary, a small supermarket has been set up, at which children take turns to work – giving them lessons in arithmetic and working skills. When the two S$10bil (RM22.9bil) casino resorts open in 2010, further career shifts will likely follow. You may well find a medical practitioner working in a casino – and I don’t mean in a clinic either.
= = = = =23 December 2006 I have recently been thinking of taking up a contract or a permanent position in Singapore. Now, Singapore's salary rates for skilled labour are definitely at par with Europe or North America. I have noticed that salary rates for tradeable skills and services are converging to the same points all across the globe. So, if you are making more or less the same amount of money for doing the same job, where should you go?
Even though salary rates are converging, taxation rates and house prices are not.
Singapore's maximum tax bracket of just 22% does stand out. There seems to be an additional old day’s pension scheme as well, but you are allowed to use it to buy your house, and they do capitalize your money inlays, and they do pay out the returns you make on the assets you invested it in.
It is not a bad savings scheme. It is surely not some kind of everybody cross-subsidizes everybody else kind of ripp off you will find in Europe or in the USA. Those schemes are preposterous. Why should I cross-subsidize a bunch of Germans and not a bunch of Bolivians? Or a bunch of Nigerians? Or a bunch of Burmese? Or a bunch of inhabitants from the planet Mars? Of course, I think charity is commendable. And I may need it myself some day, so I do not mind being charitable. But then again, I want to choose by myself who I am going to be charitable to. Being charitable in Europe is totally insane. They think that foreigners are "lucky" to pay their exorbitant tax rates.
Most Europeans are totally ignorant of the fact that the Asian middle class has much better standards of living than their middle class. It is not a "privilege" to get ripped off for the best part of your income.
I currently work in London, paying 40% tax in the maximum bracket with another 10% social security on top of that. Just try the calculation with tax code 503L. The tax code has to be "computed". That is how complicated their crap is. Most of the counterparties I work with, are in other offices, in multiple different time zones. We mostly communicate by email, even though we occasionally call each other on the phone.
So, I am going to tell the global firm I work for, that:
(1) I can do my job from any of their offices in the world;
(2) It does not make any financial difference to them to pay my London gross salary elsewhere;
(3) I like the job and the company, as well as the counterparties, but not the tax rates and the cost of housing in London;
(4) I do have an alternative offer from another global firm for a position in [Singapore].
The last bit is only half true. The truth is that I have only just started looking for an alternative offer for a position in [Singapore], contract or permanent.
Obviously, I am only going to make the proposal after landing this alternative offer. That should hedge my options. The gist of the proposal is simple: I am going to report for work on Monday in an office in [Singapore], regardless of what you decide.
Why do I place [Singapore] in square brackets?
I think Singapore is a brilliant place to work in, but I want to buy a house across the causeway in the sultanate of Johor Bahru, in Malaysia, across the causeway. The Malaysia my second home immigration programme gives me the right to stay there in renewable 5-year terms, if I buy a house in Malaysia. I just love it. I can buy a fully-fledged mansion for less than 35,000 USD over there. If anybody is interested, I will post a few more interesting urls of real estate e-markets in Johor Bahru.
Unfortunately, Singapore seems to dislike the scheme, and has instituted policies that prevent people from working in Singapore while living in Johor Bahru. I understand that there are risks associated with the scheme. But then again, it is perfectly well possible to hedge against these risks. I will weigh in on how to hedge against such risks, in a future post. Risk control is always based on very simple concepts. The biggest problem I would face, is the fact that the traffic on the causeway between Singapore and the Malaysian peninsula is perennially jammed around peak hours. The train service is notoriously abysmal. That what should be a 10-minute commute seems to take well over an hour; for a few miles, mind you. Adding insult to injury, both sides of the causeway would insist on stamping my passport every morning and every evening. I would run out of passport pages within weeks.
It is actually the British who built the causeway during the era of the crown colony. If the Singapore government could blow up the causeway, they probably would. Obviously, Singapore bans every public or private investment in additional railways or causeways.
Singapore would lose much of the heavy-handed control over its residents, native or foreign, if these residents decided to take advantage of the cheap housing across the causeway. This is probably the true, underlying reason why Singapore wants to stop people from moving across the causeway, regardless of whatever other reasons they may claim. This strategy, however, is truly self-defeating.
The long-term trend is not determined by staff following their companies where they go, but by companies following their staff where they want to go (and following their customers, and following their suppliers, and so on). The long-term result of this policy can only be that companies now based in Singapore, will set up sattelite offices in the sultanate of Johor Bahru, to cater for the staff who want to live in Malaysia, but not be subjected to traffic jams every morning.
The next step would to move the main office to the mainland. They might keep their incorporation in Singapore, and forward Singaporean phone numbers to Johor Bahru across the internet, but the real action would be in Johor Bahru. Eventually, they might even drop their incorporation in Singapore, and incorporate elsewhere. Another problem lies in Malaysia. The fact that foreigners buy houses to live in Johor Bahru while working in Singapore, bothers a certain proportion of Malaysians. The other Malaysians may think it is a great idea, this small, but very vocal group of xenophobic Malaysians, simply do not like it. The sultan himself calls foreigners "dirty", and also wants to blow up the causeway. Now, indeed, some foreigners are "dirty", while others are not. Why don't the Malaysians keep out the "dirty" ones, and leave the clean ones in peace?
Or even better, why don't the Malaysians publish a definition of what they think "dirty" means, so that all of us can figure out beforehand, if we are dirty or not, in terms of Malaysian sentiment? Being a foreigner myself, in terms of Malaysia, I have every interest in the Malaysians keeping out foreigners who are truly "dirty". If the Malaysians get rid of those, the outlook of things would improve for everyone, including myself. How am I going to solve these problems, that is, the fact that Singapore and Malaysia are trying to blow up the "colonial" causeway, sabotage it, or render it inoperable in other ways? Well, I am actually not going to solve the problem.
The global firm I work for, also has an office in Dubai. I am currently also soliciting alternative, competing proposals from other global firms with offices in Dubai. As soon as I am able to enter the one way bet, by having a backup offer sitting in my inbox, I will drop the bomb to my manager. I more or less expect my company to agree to the idea of me moving to Dubai (or Singapore anyway), and I do not expect that I will have to leave the firm.
But then again, that will not prevent me from hedging this particular position prior to entering it.