A new $1 billion scheme will be introduced to boost the hiring of local workers in the coming months, including in growth sectors, with a special focus on helping older workers.

Firms that raise their headcount of local workers over the next six months will receive a subsidy for up to 25 per cent of salaries of new local hires for one year, subject to a cap, under the Jobs Growth Incentive announced by Deputy Prime Minister Heng Swee Keat yesterday. This applies to growth firms that meet the qualifying criteria.

The co-payment by the Government will be up to 50 per cent for workers aged 40 and above, he said in a ministerial statement on further measures to support firms and workers amid the Covid-19 crisis.

Observers praised the focus on older workers, who often face greater challenges remaining employable or finding a new job if they have not been able to update their skills in recent years.

Mr Martijn Schouten, PwC's South-east Asia people and organisation consulting leader, said: "While the (growth) sectors may already be hiring, the subsidy will encourage employers to take on local workers, in particular, supporting mature workers who are at higher risk of displacement due to digital disruption."

OCBC chief economist Selena Ling said the move may help level the playing field to some extent as older workers may have higher salaries and be discriminated against at this time, when there is significant slack in the job market.

EY Asean workforce advisory leader Samir Bedi noted that there may be a requirement to provide reskilling, but this cost is also being covered through funding, which makes it commercially viable for companies to consider mature workers.

Singapore National Employers Federation president Robert Yap said the incentive could encourage companies to continue hiring or do so more aggressively, though they would also consider market forces and the available talent.

Mr Heng said: "There are bright spots amidst the severe economic situation. Our biomedical sciences, financial services and ICT (information and communications technology) sectors continue to need more workers," he said. "The public healthcare and long-term care sectors are hiring. Some firms in the food and beverage, and manufacturing sectors are growing and innovating."

The Ministry of Manpower will give more details on the scheme later this month.

• Additional reporting by Sue-Ann Tan