Budget Speech by labour MP Yeo Guat Kwang, MP for Ang Mo Kio GRC

Mdm Speaker, 

I continue to believe in the labour movement’s version of ‘welfare’, that is, the best ‘welfare’ for Singaporeans, is to ensure full employment. This boils down to ensuring a healthy and growing economy with good job opportunities so Singaporeans can lead a better life. Therefore a better Singapore to me is a home with opportunities for all working adults to upgrade, expand their skills and have a better job and a better life. As a small country with few resources, we have taken an ‘open’ approach to our economy. We have kept it free from trade barriers and engaged actively in the global marketplace. In fact, Singapore is ranked as the world’s second most open economy in the 2013 Index of Economic Freedom. We have not only grown our presence as a hub for international trade, but also attracted many businesses to establish their bases here. This has in turn increased our manpower needs and grown the job market into one that is both abundant in job opportunities and filled with value-added roles. We should continue in this direction.

Value Every Worker

My key message to all Singaporean employers is to value every worker – and treat all employees with the dignity and fairness they deserve.  Moving forward, we have to ensure that as we recalibrate our workforce numbers, that we are fair to all workers – both protecting the security of our Singaporean Core and ensuring that foreign workers are treated with rights and dignity that they are entitled to.

At the Migrant Workers Centre, we have endeavored to not only provide humanitarian assistance, but also proactively address potential conflicts, engaged migrant workers in educational outreach efforts and facilitated integration activities.

These moves set a good foundation for all employers. Valuing all workers – local and foreign – also builds a conducive organizational culture and a fair and equitable work environment that supports cross-cultural teamwork, maintains and builds trust, loyalty, productivity and high morale. It is a win-win move for all organisations to take the ‘people developer’ mindset to attract, cultivate and retain talent among all its workers.

Quality Not Quantity

Another facet of valuing every worker is to value their talent and value-added skills. This means a focus on quality, and not just quantity. With stricter foreign worker quotas, many employers are concerned about whether they will have enough workers to fill job roles. I understand these worries.

However, we must also look at sustainable ways of evolving our manpower. Just having more is not better. Skilling-up the workforce with the Progressive Wage Model is the key way forward. This has the added advantage of raising productivity and improving the welfare and wages of all, and particularly the lower-wage workers.

The government, as a tripartite partner social partner, should ensure that employers share the gains of growth and higher productivity with all workers and do more to get employers to adopt the Progressive Wage Model initiated by the labour movement, NTUC.

Help SMEs build a quality workforce

For instance I am pleased to highlight how companies can work with SPRING Singapore, WDA and the Customer-centric Initiative (CCI) to redesign its work processes to attract and retain more Singaporean workers and thus cope with the new lowered Dependency Ratio Ceiling (DRC) for the services sector.

The CCI is led by SPRING, the National Trades Union Congress (NTUC), the Workforce Development Agency (WDA), the Singapore Tourism Board (STB) and supported by the Singapore National Employers Federation (SNEF).  It aims to enable companies to take the lead in raising service standards in their industry. On average, the CCI participating companies achieved productivity improvement of 23%, and the staff’s remuneration improved by 16%.

At Han’s Group of Companies, which runs F&B outlets, CCI has improved their overall productivity by 118%. The company has also seen a 58.9% increase in revenue and and gave staff a bonus amounting to a generous 15% of the net profits. Han’s has gone a step further. For one, it gives $200 to any staff that refers a new employee that stays on for more than three months and offers a bonus to staff whose outlets exceed the sales quota.

Han’s is committed to hiring Singaporeans only for all office-based positions. In line with its wage restructuring, all servers were given a raise of $200. Technology and automation, in the form of automatic roasters and tablet computers to help customers order while still waiting in line have also boosted sales by an average of 10% across its 24 outlets.

Mdm Speaker, companies that have taken on the commitment to upgrade their labour force, raise wages and increase productivity should be rewarded. I urge the Ministry of Manpower to consider granting short-term DRE flexibility to these companies that have embarked on schemes with the NTUC, the Employment & Employability Institute (e2i), SPRING and WDA.

Cluster Approach to Up-Skills, Up-Jobs and Up-Wages

Another way that has helped in the progressive wage movement is the NTUC Hospitality and Consumer Business Cluster (HCBC) launched for the Hotel sector in July 2012 and the Food & Beverages and Retail sectors in September 2012.

Thus far, the HCBC has worked with six hotels to re-create several job positions to optimise their manpower use. Such positions usually command a 30 to 50% premium in salary over a traditional single skill-set job. For example, Park Hotels Group created a new position called Hotel Operation Specialist Team (HOST) where a staff who is skilled in Housekeeping, Front Office and Food & Beverage functions is able to be deployed more effectively to cater to the operational needs of the Hotel will command a starting pay of $1,800 compared to $1,300 for the traditional role. This flexibility and ability to better deploy their staff to areas of manpower shortage would not be possible if the workers had not been upskilled. Such trend of multi-skilling positions is being adopted in other hotels too. Mandarin Oriental Hotel and Amara Singapore Hotel are among the early adopters of such new jobs creation.  

At Mandarin Oriental, workers under the newly created position of Hotel Operations Executive (HOE) enter at $1,800 to $2,200(depending on experience) to be trained as all-rounder in Front Office, Housekeeping, Food & Beverage and banqueting functions. These workers will still be placed in an anchor department after their training but they could be called upon to help in other department should the need arises.

Similarly at Amara Singapore Hotel, they coined their own group of multi-skilled workers as Amara’s Multi Operational Skill Team(A’MOST) who can be moved across Front Office and Food & Beverages functions. The starting pay of A’MOST worker is $1,800.

In our pilot phrase, a total of 95 vacancies have been created and 59% of these positions have been filled. These positions help train workers in more than one skillset, which not only enhances the workers employability and allows the hotels to improve productivity and pay them more, but also helps the hotel cope with a shortage in manpower.

Executive Development Programme & Core Executive Programme

The HCBC also worked closely with agencies such as e2i and SPRING Singapore on their respective EDP and CEP, where there is a clear, defined and accelerated career progression aimed at attracting local graduates from local tertiary institutions into the Retails, F&B and Hotel sectors.

Since the launch, the responses from business have been encouraging.  For a start, 30 companies have gotten approval for support for hiring management and executive staff under the EDP and CEP. These companies alone generated a total of 193 PME vacancies for our local poly and university graduates. (See Annex 1)

Make Wage Increase Sustainable

Wages are rising due to full employment and the tight labour market situation in Singapore. In order to cope with rising wages, businesses have to invest in productivity initiatives that help them reduce reliance on labour or move up the value chain. Such productivity investments are costly and may take some time to bear fruit. Thus, I welcome the Wage Credit Scheme as a form of transitional support for businesses before their investments take off. If companies big or small take on the suite of other productivity measures that the Government help businesses begin or carry on their productivity journey, the wage increase they put in place with the support of WCS will be sustainable in long run.

Fairness in Recruitment

Another aspect of valuing all workers – and treating all employees with the dignity and fairness they deserve is fairness in recruitment. Employers are not just economic agents that drive our country, but play a social role as well, and as responsible corporate citizens, should abide by values such as fairness. This is the case in recruitment drives. Employers need to play their part to ensure that the qualifications, training and skills required of local workers are the same as that required for foreign workers as well.

At the end of the day, I believe that we need to secure migrant workers with the right technical skills, as well as the social adaptability to co-exist with locals colleagues this will in turn help us focus on productivity and continuous improvement to build a bigger piece of the economic pie for all to share in.

One area that should also be looked into is entry-level Employment Pass. We must ensure that employers give fair opportunity to fresh graduates from our local Polytechnics and Universities.

Enhancing Legislative Protection

I am pleased about the amendments to the Employment of Foreign Manpower Act to increase protection of migrant workers and increased enforcement to punish errant employers. We should now review the Employment Act too. I renew the call for more protection for all workers, particularly in the area of non-payment of salaries. We should look into an enhancing the recording of salaries, such as mandatory payslips. We also have to come down strongly on employers who do not pay their workers on time. We urge MOM to prosecute such employers to set a firm stance that such moves are unacceptable.

Ease of Mind with Portable Medical Benefits and a Safer and Healthier Workplace

Besides our moves to create a vibrant and dynamic manpower landscape that provides many opportunities and productive outputs in a fair and just way, we must look beyond just managing manpower to optimize and sustain it. To this end, we must continue efforts to ensure safe and healthy workplace for all. It is essential that every worker, whatever his or her job scope, returns home safe and sound each day.

Now that the Workplace Safety and Health (WSH) Act covers all workplaces, we must ensure that this is an Act that has teeth and that all workplaces are equipped to maintain their WSH capability. I urge MOM to roll out more incentives and training to support unions and companies to achieve their WSH targets and monitor that these are sustainable. 

Lastly, I’d like to reiterate my call for reviewing and enhancing the portable medical benefits. A flexible and comprehensive portable medical scheme is a good form of security for our workers, particularly with the drive towards longer employment and the implementation of the Reemployment Act. Currently, the government only gives tax incentives for employers to contribute additional MediSave for their employees. I hope the Ministry of Finance would review its tax incentive scheme to encourage efforts that enable medical benefits provided by employers to be made portable.

Conclusion

Mdm Speaker, with the new direction – lower DRCs, higher levies, stricter manpower regulations – a new reality is upon us. These moves, while challenging now in the initial stages, will serve to help us do better, be more productive, innovative, self-reliant and better skilled. I urge employers to take on the challenge and the government to support efforts. Most importantly, we must go for Quality Not Quantity, Value Every Worker in this transition and transformation process.

Annex 1

CORE EXECUTIVE PROGRAMME (CEP) & EXECUTIVE DEVELOPMENT PROGRAMME (EDP) Approved Cases

*f Hotelevegares fucntions.ont Office and Housekeping functions.ions.e. of the Hotel tmfor an employee to celebrate his or histh