What you need to know about the new Career Support Programme

As employers, we may not like to admit it but the bias against the hiring of older workers is real.

In spite of the manpower crunch that Singapore and most businesses are facing, many companies prefer not to hire older professionals, as they are perceived to be more "expensive" and "less flexible" due to their many years of experience. We can certainly understand this, given the tough business conditions that companies are operating in.

These older professionals, managers, and executives (PMEs) then find themselves marginalised as their age and corresponding experience end up working against them. They get priced out of the labour market, especially when employers are sometimes able to hire two younger staff for their one salary.

Enter the Career Support Programme (CSP) that the Ministry of Manpower will launch on 1 October to help this group of PMEs secure a job.

Under the two-year pilot programme, employers receive wage subsidies for hiring local PMEs aged 40 and above who have been unemployed for at least six months, and are seeking mid-level jobs that pay $4,000 onwards.

Here's how the scheme works:

1) For PMEs aged between 40 and 50:

• Wage support of 20% of gross monthly salary (capped at $1,400/month) for the first six months.

• Wage support of 10% of gross monthly salary (capped at $700/month) for the next six months.

2) For PMEs aged 50 and above:

• Wage support of 40% of gross monthly salary (capped at $2,800/month) for the first six months.

• Wage support of 20% of gross monthly salary (capped at $1,400/month) for the next six months.

As an HR professional, I applaud these efforts and incentives by the government to simultaneously help both Singapore businesses and local PMEs.

If these schemes do end up meeting their intended objectives, we should see companies becoming more open to hiring mature workers aged 40 and above. This is one method that has been widely advocated to help ease the manpower crunch that most businesses in Singapore are facing.

In theory, this group of mature workers should then find it easier to secure employment, as companies are incentivised to hire them through the wage support.

Realistically, however, while the wage support does provide some form of financial relief, it is only for a one-year period following which employers are left with a heftier labour bill after the scheme ends – if we weigh this against the alternative of hiring younger workers with less experience.

Reminiscent of the Jobs Credit scheme from a few years ago, the CSP initiative may thus contribute to higher manpower costs in the long run, against the backdrop of a tough business environment and ever-increasing business operating costs.

There is also a caveat to the CSP: employers that accept the grant have to send the workers hired under this scheme for training. Participating employers have to commit to providing, and pay for, on-the-job or external training for these employees.

While the training should enable these employees to contribute more effectively to the company, it also means that they will naturally expect wage increases as they acquire higher skills. Thus, the question becomes whether there is a net benefit to the employer after all, from a financial standpoint.

Ultimately, the success of the CSP will be measured by its adoption rate by employers and only time will show if they readily embrace it.