3 Lessons Young Singaporeans Can Learn From the Retrenchment of Middle Aged PMETs
Once upon a time, getting a cushy PMET job and rising to senior management was the Singaporean dream. Claw your way to the top of the corporate ladder and you’d be in for a lifetime of cruising around in your Porsche and golfing at the country club. But those days are gone, and middle-aged, highly-trained PMETs are now first in line for retrenchment at many companies. These people have not only been most affected by the increased spates of retrenchment last year, but are also having the hardest time finding jobs. Many of those who do find jobs take a huge pay cut or end up doing things like driving taxis.
Now, all this might sound awful, but is life really worse for someone who’s been earning $10,000 for the past 10 or 20 years only to lose his job, or for a lower income earner who’s been toiling away for 30 years but earning only $1,000 a month? Obviously, the PMET should be in a much better place than his lower earning counterpart if he has played his cards right in his economically active days and saved and invested wisely. Unfortunately, we often get the reverse scenario, where PMETs are so mired in debt and their lifestyles are so expensive to upkeep that losing their job immediately becomes disastrous. You might be young now, but in a decade or two you could be facing the same risk of being made redundant. Here are 3 things to never forget along the way.
Jump start your retirement savings and investments when you’re young Judging by the number of Chanel handbags you see on the streets, young Singaporeans aren’t prioritising saving and investing, figuring they can handle that when they’re older, more boring and have higher earning power. A 2014 report revealed that 36% of young Singaporeans had no savings at all, while 25% had less than $6,000. The generation before didn’t fare too well either, with an average of just $60,000 in savings. The problem with this mentality is that it’s premised on the belief that it’ll be easier to save money at a later age. That isn’t the case for many of the PMET’s who’ve been retrenched and found that they were bogged down by car loans, housing loans and dependents to support. If these people had prioritised saving and investing when they were younger, getting laid off might not have been as scary as it is right now. Sure, they would have been earning much less in their younger days. But with the help of compounding interest and the benefit of a burgeoning economy, their money could have grown significantly over time—probably much more than it will ever grow in their remaining years before retirement. The best time to start saving for retirement is when you’re young. Even if you can’t save as much as you think you will when you’re older, if you invest it wisely your money can work a lot harder than it can if you only start in middle age. When you reach your forties or fifties and your risk of getting retrenched rises, if you already have a decent nest egg saved up you might see your derailed career plans as a rather welcome sign that it’s time to take it easy. If you haven’t, however, good luck.
Be wary of inflating your lifestyle as you rise through the ranks The most recent Straits Times report on PMET retrenchment mentioned that some of the retrenched folks complained about being bogged down by financial obligations like car loans and housing mortgages, and lamented having to adjust their lifestyles. That makes you wonder just how much of their lifestyle inflation was necessary to begin with, and how much was due to their wanting to live the high life and being complacent enough to think they’d be able to enjoy such high salaries for the rest of their careers. Sure, your financial obligations do increase when you buy a home or have kids. But is it really necessary to go into debt just so you can be seen driving a BMW or pay more than a million bucks for a condo? Young Singaporeans who are lulled into a false sense of security by a job market that makes employment readily available to the young and relatively cheap should take heed that the higher you climb, the more precarious your position will be, unless you are in field that renders you more or less immune to retrenchment (meaning you’re a teacher, doctor, data scientist, civil servant or similar). You don’t really want to live like a king when the throne can be snatched from under you at any moment.
Never get complacent at work Retrenchment might sound unfair to an outsider—after an employee has given a company the best years of his life, casting him aside sounds barbaric. But ask any young Singaporean who’s been subject to the incompetent tyranny of middle and upper management folks well past their prime, and you’ll receive a different opinion. Complaints about supervisors who are even less competent than rookie hires and manage their teams terribly are sadly quite common, and it’s not very difficult to say why these folks would be the first to get laid off. Due to the fact that workplaces in Singapore are generally very hierarchical, many employees who are senior enough to become supervisors or managers get complacent about their jobs, thinking they can now rely on their subordinates to take the rap if things go wrong at work. Of course not everyone is like that, but ask around and you’ll find it’s more common than you think.
As a young employee who might one day be promoted, never forget that the higher your salary is, the harder it is to show you deserve it. You have to be more knowledgeable and better at your job than your subordinates are or risk being replaced. That means constant upgrading, learning new things and at times being made to feel like an old dog trying to learn new tricks. It may sound like a bother, but that’s what you’re really being paid for.