Singapore is out to upskill its middle-aged workers and keep them current with an increasingly AI-heavy economy.

In the recently delivered Budget 2024, Deputy Prime Minister and Finance Minister Lawrence Wong announced a massive new round of funding for mid-career workers aged 40 and above who want to upskill or reskill under the city-state's lifelong learning initiative, SkillsFuture. They will receive S$4,000 in credits usable for approved education programmes, eight times the previous amount given out.

“Learning cannot stop when formal learning ends,” the minister warned, pointing out that even though Singapore's workforce is high in skill and technical efficiency, the nature of expertise undergoes constant flux in today's world.

Key points:
Upskilling and reskilling has a low takeup rate among middle-aged and older workers
SkillsFuture courses currently include some without clear employability outcomes
The new funding will specifically target selected training programmes

Why the sudden emphasis on upskilling?

Earlier, Wong had highlighted several areas where Singapore's economy is undergoing accelerated evolution, including the financial sector, sustainability, and the increasingly rapid incorporation of AI. Budget 2024 dedicates large amounts of funding to some of these areas, including a S$2 billion top-up for developing the financial sector and S$1 billion for developing Singapore's AI industry over the next five years.

Bringing along the small and aging talent pool on this journey of change has been a government priority for several years now, but the SkillsFuture initiative, created to address this very issue, has not seen a very high takeup rate. Statistics provided by the Ministry of Education indicate that overall training participation by eligible workers was around 50% in 2022, with participation falling significantly among older age groups.

Anecdotally, the quality of courses available under the programme has also been hit and miss, and aside from employer-sponsored training and some select case studies, clear links have not been established between usage of the SkillsFuture programme and improvement of career or wage trajectories.

The new funding clearly aims to address this gap, with tighter restrictions placed on the kinds of courses it can be used for. Where the previous tranche of SkillsFuture funding allowed participants to take a very wide range of courses, including some without clear employability outcomes or even certifications, the new funding will only be permitted for “selected training programmes with better employability outcomes”. These include diploma programmes at local polytechnics.

Higher levels of support required for mid-career workers

Earlier this year, the Ministry of Education had noted that “mature workers require more support to pursue substantial reskilling and upskilling to stay employable”, referring not only to the cost of  training programmes for those more advanced in their careers, but also the needs of this demographic who may have financial commitments and families to support and may not be able to afford time away from work for retraining.

Budget 2024 appears to take aim at this aspect of the issue with additional subsidies and training allowances for workers aged 40 and above who take up a full-time diploma programme from the academic year 2025 onward. The monthly training allowance in particular seems to be meant as an income replacement, offering 50% of the individual's average monthly income over the last 12 months.

This monthly allowance is capped at S$3,000 with a maximum of 24 months' worth over the person's lifetime. According to the Budget statement, this amount and duration is calculated to see workers completely through a career transition programme – implying that the government projects a growing number of workers who will undergo career transitions and need this level of support to do so.

Will the new funding work, though, given that the SkillsFuture programme took seven years to increase its takeup rate from 35% to 50% even with the pandemic as impetus in 2020? In a best-case scenario it won't need to work – but in a worst-case scenario, more and more middle-aged workers will be squeezed out of their jobs, and the new funding will be used as extensively as the government seems to predict.

Ideally, of course, those at whom the upgrade is targeted are already seeing the writing on the wall and will quickly take steps to pick up this potential lifeline. As the Finance Minister said in the opening of his Budget speech: “We cannot afford to be complacent, especially in a more volatile external environment.”