Enhancing workers' value - starting with the buyers
23 August 2007
Media Release
1. Since National Trades Union Congress (NTUC) launched the NTUC Workfare Initiative (NWI) to help low-wage workers take on better jobs and earn better pay in January 2006, it has undertaken numerous programmes such as job re-design, job re-creation, provision of NTUC Education and Training Fund, and active promotion of Best Sourcing Initiatives (BSI).
2. Under the BSI, a strategic value-chain relationship exists between buyers of contractual services, service providers and contract workers. When buyers award contracts to service providers based on performance rather than lowest price (known as “cheap sourcing), workers can earn better wages, and enjoy better working conditions and more benefits. As a result, workers are more committed and provide higher quality of service. This means that service providers will enjoy lower worker turnover rate, higher productivity rate and more flexibility to improve operational efficiency and cost effectiveness. In return, buyers receive higher-value returns on outsourcing expenditure from the higher and sustained standard and quality of service provided by service providers. Everyone benefits from this value-chain system.
3. However, the value returns of this value-chain system can be achieved only when service buyers adopt BSI in their outsourcing efforts as service procurement by buyers is the starting point of the system. To engage buyers on BSI, NTUC, Ministry of Manpower (MOM), Singapore National Employers’ Federation (SNEF), Singapore Business Federation (SBF) and Singapore Compact jointly organised the Best Sourcing Seminar on 23 August 2007.
Best Sourcing Seminar
4. The objectives of the seminar, with the theme “Best Sourcing: Win-Win Strategy for Business and Workers”, were to increase buyers’ understanding on the value of adopting BSI in engaging contractual services; and more importantly, how they can implement BSI in the workplace.
5. During the seminar, companies who practised BSI, namely PROSEC Security Pte Ltd, SIA Engineering Company Limited and Town Councils showcased how strategic partnerships between buyers and providers were achieved using BSI and how workers’ worth are enhanced through skills training and job enlargement; they also highlighted both buyers’ and providers’ contributions towards provision of fair employment terms and working conditions for contract workers.
6. NTUC presented on the impact of outsource contract prices on workers’ wages, while MOM spoke on the compliance of the employment laws by buyers when they source for labour services using the Buyers’ Guide and Checklist throughout the service procurement and consumption period. Singapore Compact, representing the business community, touched on the need to adopt BSI and the businesses’ social responsibilities towards the contractual workforce.
Unit for Contract and Casual Workers (UCCW)
7. In June 2006, NTUC set up the Unit for Contract Workers (UCW) with the objective to assist lower income contract workers in areas relating to employability, medical benefits and fair employment terms. And as there is an increasing trend of more contract workers, as well as casual workers, in
8. UCCW’s name change reflects its drive to enhance the economic and social well-being of the low wage contract and casual workforce by reaching out to and helping a wider spectrum of low wage workers of the informal economy. This is in line with NTUC Labour Movement (LM) 2011 vision to be an all-inclusive labour movement. Statistics from 2001 to 2004 showed that there has been a 19% increase in CCW; and in 2006, 12% (172,000) are employed on contractual terms with more than 50% of them on contractual period of less than one year.
9. UCCW has also adopted a new logo comprising four stylised persons linking together, signifying the importance of people in the workforce. The five colours of the UCCW logo represent employment (green), energy (orange), coming together (blue), strength and passion (red), and stability (grey).
10. The UCCW aims to achieve its objectives by communicating and advocating the adoption of BSI, such as educating all parties on the statutory rights of workers and promoting workfare bonus to engage the workers. It also seeks to enhance workers’ welfare in areas of medical needs by providing affordable out-patient benefits, and insurance needs by offering discounts off premiums of the Enhanced IncomeShield basic plan. To ensure that workers remain competently employable, service providers are strongly encouraged to send workers for training and skills-upgrading, or explore job expansion or job re-design by utilising the varied programmes and funds available such as the ADVANTAGE! Fund.
11. Over a period of fourteen months since its inception, UCCW has successfully converted four thousand workers to the Central Provident Fund (CPF) scheme so that they can benefit from the Workfare Income Supplement (WIS), and provided discounted medical treatments to some 1,500 workers. It strives to convert another 6,000 workers to the CPF scheme, and is working with strategic partners to provide more benefits to workers such as meals discounts at NTUC Food Fare Co-operatives’ stalls island-wide.
Beyond Best Sourcing Seminar
12. As it is imperative that all parties in the strategic value-chain has a common understanding and unified approach in implementing BSI in the workplace for everyone to benefit from it, UCCW will also be organising a series of workshops specially for contractual service providers in coming months.
Ms Cham Hui Fong
Director
Industrial Relations Department
National Trade Union Congress
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About National Trades Union Congress
The National Trades Union Congress (NTUC) is a national confederation of trade unions of workers in the industrial, service and public sectors representing about 480,000 workers in
About Best Sourcing Initiative
Best Sourcing is essentially a tool to compare rigorously and comprehensively the cost of providing services in-house with external contractual service providers. The use of performance-based contract is a method to manage the performance and effectiveness of the contractual service providers, to provide space, incentives and flexibility for the providers to continuously innovate to ensure quality of service at the lowest cost possible. Ultimately, it will mean better returns to the providers, who will share it with the workers.
