SINGAPORE - Companies need to do their part and help provide attachments and traineeships to workers retrenched amid the Covid-19 outbreak, said Senior Minister Tharman Shanmugaratnam.

On its part, the Government will be "generous" in supporting the efforts of these businesses, he added.

Speaking at DBS Bank's Asian Insights conference on Thursday (July 23), Mr Tharman said the challenge of keeping Singapore's unemployment figures down will "grow in the months to come" even as the Republic has so far kept the jobless rate relatively low.

"Companies have to play ball," Mr Tharman said, adding that the Government will provide "significant help" to firms that will do so.

"We're going to be very generous in doing that, and, effectively, the state will pay for a good part of the wages or allowances of those who have these traineeships and attachments," he added.

He also said permanent jobs will be in short supply so "we have to find ways of giving them attachments and traineeships".

Mr Tharman chairs the National Jobs Council, which oversees the SGUnited Jobs and Skills Package announced in May. The initiatives are part of efforts to support close to 100,000 job seekers this year by creating new positions, traineeships and skills training places.

The Government will also work with companies to help them bring forward their hiring plans. Mr Tharman said companies that are still growing are unsure of when to start hiring, given that the Covid-19 has brought about much uncertainty.

Firms, however, know that they will ultimately need to hire more people to grow their business, and the Government's role is to "help them to bring forward hiring to today, this year and next year", he added.

Mr Tharman, who is also Coordinating Minister for Social Policies, was part of a dialogue on the first day of the two-day conference, which was held online. The dialogue also featured former Reserve Bank of India governor Raghuram G. Rajan, and was moderated by DBS chief economist Taimur Baig.

During the dialogue, Mr Tharman warned of the debilitating effects of unemployment, and said the economy will collectively lose skills if large numbers of people are unemployed for long.

"We are not going to be able to get back better... and not going to be able to come out of Covid-19 in a better state. So we've got to bring forward hiring."

Prolonged unemployment will also put a strain on the psyche of workers who had been made redundant, he added.

With prolonged unemployment, it is hard for people to get back to normal, Mr Tharman said. "It's not like a rubber band where you stretch it and then it snaps right back. You stretch it, and it doesn't snap back. It becomes looser."

Singapore's approach to saving jobs first is not unique, he added, saying that several European countries are going the same way.

In the first phase of the crisis, governments have helped firms to "keep workers where they can, even if it's preserving jobs which may not be relevant two or three years from now", he said.

If they did not do so, states would have had to provide support to the unemployed, so it is better to subsidise jobs, he added.

On the attachments and traineeships that the Government is working aggressively to promote, Mr Tharman said matching will be done as much as possible to ensure that workers are put into roles where they can use their existing skills.

"So, they keep accumulating skills," he said, even if workers' placements "may not be with the same type of firm or exactly the same industry, it may be an adjacent industry".

"Never underestimate the way in which previous skills and old skills are relevant to the future. They're always relevant," Mr Tharman added.

And it is always relevant to find a way to help workers accumulate skills for them to "move from a traineeship or an attachment into a new permanent job, brimming with confidence", he said.

Momentum is being created by industry leaders such as DBS and Google, Mr Tharman said.

"One role of governments is to work with industry leaders to bring others along... If we work in concert with industries, small firms and big firms, foreign and local, you're more likely to get the small firms coming along.

"It's also about the trust in the system. Because if companies know that others are going to play the game, they are more willing to play the game, and every company ends up better off."

Said Mr Tharman: "The whole corporate sector is going to have to collaborate with us on this - keeping people engaged at work, keeping them on a path of accumulating skills."

The DBS Asian Insights Conference ends on Friday.