Singapore's Traineeships: The Unspoken Cost to Your 1st Home

This leaves graduates in a frustrating catch-22. The pressure to stand out in an oversaturated applicant pool is immense, leading to a frenzy of applications—sometimes numbering in the hundreds for a single individual—that often yield little to no response. It is within this climate of intense competition and dwindling junior-level openings that government initiatives like the new Graduate Industry Traineeships (GRIT) scheme emerge, presented as a structured solution to bridge the gap between academic knowledge and workplace readiness.

This precedent casts a long shadow over the new GRIT scheme, fuelling a debate over its true purpose. For recruiters and policymakers, these traineeships are a vital tool for imparting hands-on skills and providing a foothold in the corporate world, arguing that a long-term career perspective should outweigh the focus on immediate monetary benefits. For many graduates, however, the experience feels more like an "extended internship." They express valid concerns about the lack of a clear pathway to a permanent role, fearing they might be caught in a cycle of temporary stints that pad a resume but fail to launch a stable career.

The core of the dilemma is whether a traineeship is a genuine career accelerator or simply a form of subsidised, temporary labour for companies. Without a strong commitment from host organisations to mentor, develop, and seriously consider trainees for permanent positions, these programmes risk becoming a holding pattern—a way to keep unemployment statistics down without fostering true, sustainable career progression.

Because trainees are not considered employees, host companies are not legally required to make CPF contributions. A graduate on a full-time starting salary of SGD 4,313 would see a combined SGD 1,595 deposited into their CPF accounts each month from their own and their employer’s contributions. Over a six-month traineeship, this amounts to a nearly SGD 9,600 shortfall in their CPF savings—funds crucial for their Ordinary Account (housing), Special Account (retirement), and MediSave Account (healthcare).

This isn't an abstract loss; it has immediate, real-world implications. As some former trainees discovered, their employment status made them ineligible for certain HDB housing grants that require a track record of continuous employment and CPF contributions. The traineeship, meant to be a step forward in their career, inadvertently becomes a step backward in their ability to achieve a key Singaporean life goal: owning a home. This prolonged "financial adolescence" forces a delay on major life decisions and widens the gap between those who can afford to subsist on a trainee allowance with family support and those who cannot.

This initial step also sets a trajectory for future earnings and career velocity. Starting on a lower pay scale, even for a short period, can anchor future salary negotiations at a lower baseline. As one former trainee noted, the lower traineeship allowance partially influenced the salary of his first full-time job. Furthermore, while traineeships provide exposure, they may not always offer the depth of experience gained in a permanent role. Trainees are often assigned to less critical, peripheral projects, which, while useful, may not build the core, high-demand skills as quickly as a junior employee who is immediately entrusted with business-critical responsibilities. This can create a subtle but growing gap in expertise and earning potential between those who secure direct full-time roles and those who enter the workforce via a series of temporary stints.

To facilitate this, regulatory frameworks may also need to evolve. Many company leaders are hesitant to provide forward-looking statements for fear of regulatory or litigation risks. Creating a "safe harbour" provision for such routine disclosures—a common practice in markets like the US—would empower companies to offer clearer guidance, allowing investors to make more informed decisions and creating a more efficient and communicative market for all.

Graduates must approach traineeships not as a last resort, but as a strategic placement. This involves rigorously vetting potential host companies by asking pointed questions about mentorship structures, learning outcomes, and historical conversion rates. It means treating the traineeship interview as a two-way street to determine if the organisation is truly invested in talent development or merely filling a temporary headcount. The goal should be to select a traineeship that offers the highest potential for skill acquisition and a pathway to a permanent role, thereby maximising the return on the financial sacrifice made.

For policymakers, the focus should evolve from simply creating placements to ensuring their quality and effectiveness. This could involve creating stronger incentives for companies to convert trainees, such as tiered co-funding models where government support increases for firms that offer permanent positions. Furthermore, there is a clear need for greater transparency. A public-facing dashboard showing conversion rates by company or industry for government-supported traineeships would empower graduates to make more informed decisions, rewarding companies that genuinely invest in new talent. Ultimately, navigating this new landscape requires a shared understanding that while experience is invaluable, it cannot come at the long-term expense of a generation's financial foundation.