EMPLOYERS here expect staff costs to climb with the higher retirement age, as well as Central Provident Fund (CPF) contribution changes.
And, besides cost concerns, older workers could be shunned in the labour market as they may not want to work full-time, or lack digital and other skills, according to recruiters who spoke to The Business Times.
But, despite the aches and pains, businesses may have little choice but to hire seniors, as a labour crunch deepens - with fresh foreign manpower curbs set to kick in next year, and younger workers spurning heavy-duty rank-and-file roles.
Foo See Yang, managing director and country head for recruiter Kelly Services, told BT that there are companies with "some level of apprehension, particularly relating to (older workers') health, lack of technological knowledge and ability to change".
He cited a recent study, done by a tie-up between his firm and Japan's Persol Holdings, which found that just 42 per cent of employees here think their workplaces accommodate staff over 55. But recruiting older workers is a strategic move "in the face of talent shortage and economic uncertainties", Mr Foo also said.
There were close to 3.6 million people working in Singapore last year, with some 779,300 of them citizens or permanent residents 50 years or older, according to manpower data.
At the same time, the share of Singapore residents working past 65 years crept up to 4.1 per cent, from 1.8 per cent of all workers in 2008.
United Overseas Bank economist Barnabas Gan also noted that - if demographic trends continue - the number of people above 65 could outnumber under-15s by as early as 2024.
Singapore "has reached a significant inflection point" in the population's age profile, making a higher retirement age "a timely step in the right direction", said Krish Seshadri, Asia-Pacific and Middle East chief executive for job website Monster.com, while arguing that "experienced workers... will help ease the talent crunch".
As companies are weaned off foreign labour, "some employers will be forced to use technology to reduce manpower, or employ older workers", economist Tan Khay Boon, senior lecturer at SIM Global Education, noted.
Dellen Soh, chief executive of F&B operator Minor Food Group Singapore, told BT that re-hired workers past 62 are already one-tenth of the 700 employees in the group's portfolio, which includes Thai Express, Xin Wang Hong Kong Cafe and Poulét.
"I'm pretty sure this workforce will go up, because we can't really get young people to come into this sector," Mr Soh told BT over the phone.
Echoing such concerns, Cher Kwang Siong, managing director of family-owned car dealership Kheng Keng Auto, called the higher retirement age "a very good initiative, because our workforce is becoming smaller and smaller, and we can keep experienced workers for longer".
To be sure, higher retirement and re-employment ages "logically will put further pressure on the cost of medical benefits for companies", said Cedric Luah, regional head of health and benefits at insurance consultancy Willis Towers Watson, which expects healthcare benefits costs here to grow by 9.1 per cent year on year in 2019.
"In particular, such concerns may potentially be more relevant for the white-collar segment and service industries, given the higher probability of employees extending the retirement age or being re-employed."
Even so, the unit cost of labour rose by 3 per cent year on year in the second quarter, against 2.4 per cent in the first three months, Department of Statistics data showed. Such growth is tough for firms to swallow.
Catalist-listed Advancer Global's janitorial and other businesses have already seen staff costs go up on the roll-out of the Progressive Wage Model, which governs the cleaning, security and landscape sectors, according to Ong Eng Tiang, head of building management and security services.
One-third of its 1,200 workers are facility management and security staff over 50 years old - hired largely on permanent contracts, and allowed to work for as long as they can.
Manpower costs affect the bottom line "particularly... in the cleaning and security industries", noted Mr Ong.
Meanwhile, the 1,600 employees of Catalist-listed restaurant operator RE&S Holdings can now count on hospitalisation coverage until they turn 74, under their staff benefits. But the company expects more older staff to join or stay - even past a higher re-employment age of 70 years in 2030 - which may affect the bottom line.
"Companies would have to absorb hospitalisation costs for older staff who do not qualify for the hospitalisation coverage", while putting more into the CPF accounts of those aged 55 to 60, Lim Shyang Zheng, RE&S' chief operating officer, told BT.
Still, Glenn Huang, vice-president for group corporate affairs and communications at mainboard-listed bakery and eatery operator BreadTalk Group, said better benefits "may incentivise more older workers to enter the workforce, and help to alleviate the tight manpower situation".
Prime Minister Lee Hsien Loong has promised a support package for employers in next year's Budget - fuelling Mr Ong's hopes that Special Employment Credit scheme wage subsidies for disabled and older workers will be extended beyond end-2020.
Mr Ong also suggested that absentee payroll benefits be expanded to include not just training-related absences but also medical leave for older workers, and asked for silver-friendly employers to be viewed more favourably in public contract awards.
RE&S' Mr Lim called for "a combined effort" from stakeholders such as insurers and public agencies, to support costs related to training, healthcare and CPF contributions.
Amid job growth for older workers, "we also hope to see nationwide programmes, such as vocational education, to attract young people to work in the F&B scene", he added.
Happily, not all businesses expect to feel the pinch from greying labour.
A spokesman for supermarket chain Sheng Siong Group said the retirement age changes are unlikely to weigh on business costs, "as our compensation system varies more with performance rather than seniority".