1 As Singapore speeds up efforts to restructure its economy to drive and achieve an inclusive growth for Singaporeans, it is the companies and workers who would ultimately benefit from productivity gains and better wages respectively.
2 While there is a stronger push to have more small and medium-sized enterprises (SMEs) embark on the journey of strengthening the core of Singaporean workers; raising productivity; and enhancing job and wage progression, there are already SMEs here that have made headway in these areas. One such SME is MTQ Engineering Pte Ltd (MTQ Engineering).
3 NTUC, together with the Shipbuilding and Marine Engineering Employees’ Union (SMEEU), organised a Learning Journey for key union leaders to MTQ Engineering today to find out what this Singapore SME has done to make it an interesting case study for other SMEs.
4 MTQ Engineering, a unionised company under SMEEU, provides integrated, cost-effective and efficient repair solutions in the oil and gas equipment manufacturing industry. It has enhanced its remuneration package so as to attract Singaporean workers as it believes in building a Singaporean core to sustain its competitive edge. And it has also benefited from NTUC’s Inclusive Growth Programme (IGP) funding to improve work processes and enhance productivity.
Building a Singaporean Core
5 To strengthen and retain the core of Singaporean workers, MTQ Engineering has put in place specific strategies to achieve this objective over the years. This has resulted in the company achieving a higher percentage of local workers vis-a-vis foreign workers as compared to the industry average of 20 per cent local workers and 80 per cent foreign workers. The company’s total staff strength of 177 comprises 53 per cent Singaporeans/PR and 47 per cent foreigners. Singaporeans take up all of the management and managerial positions (100 per cent). For its 48 supervisors/foremen/executives, 39 (81 per cent) are Singaporean/PR. In the rank and file positions, 37 (34 per cent) are Singaporean/PRs and 73 are foreigners.
6 As part of its efforts to attract Singaporean workers and build up on its Singaporean core, the company has revised its starting pay for a polytechnic graduate, which has risen steadily by 28 per cent over nine years (2002 to 2011). Compared to the company’s competitors and even customers, MTQ Engineering’s average Annual Increment (AI) is competitive with a better average bonus than the others. For example, the company’s AI for 2011 saw an increase of 44 per cent from 2010 while bonus was about 17 per cent more in 2011 than 2010.
7 The company has also set in place career progression and overseas posting opportunities as an additional initiative to attract and retain Singaporeans in its workforce. The company also invests in the training and development of workers who demonstrate potential or meet the requisite skills and supervisory abilities so that they will be able to be promoted and take on heavier responsibilities and improve their pay. (See Annex A for the profile of two workers who are enjoying a better job and wages through their respective career progressions.) The workplace environment has also been improved to make it more comfortable and appealing for the workers.
Achieving Better Jobs for all – Productivity and Gain Sharing Initiatives
8 To improve work processes and enhance productivity in the company, SMEEU has helped MTQ Engineering tap on the Labour Movement’s IGP funding, which is managed by NTUC’s e2i (Employment and Employability Institute), to purchase an automated welding machine to help its workers achieve higher productivity.
9 Through the introduction of the Automatic Subarc Welding machine, productivity for welding jobs has increased. Manual welding jobs that previously required 24 hours can now be completed in six hours - a productivity improvement of 75 per cent. Not only is there time saved, there is also greater accuracy and consistency applied for these welding jobs. The company also saw the hours required for re-working reduce by 30 per cent. The automated welding machine also made welding work much safer and less labourious. In achieving its productivity targets, the company rewarded its workers by distributing a one-time $500 incentive in the form of NTUC vouchers in February 2011; sharing 10 per cent of its profits in June 2011; and offering them a bigger yearly increment last year.
10 With the productivity improvements, the company was able to increase the pay of its welders by four per cent and adjust their salary ranges. By sharing its productivity gains with its workers, the company hopes to increase labour productivity, so that it can be more competitive and ultimately, more profitable.
11 Finally, the company’s annual Key Performance Indicators (KPIs) are formulated and implemented with inputs from its workers. These KPIs are aligned with business strategies and objectives, and are monitored, tracked and measured. Once these KPIs are met, the company will share its gains with its workers. For example, the company intends to share rewards with its employees in June 2012 to motivate workers who have stayed with the company through these years.
12 The NTUC Learning Journey - the second to be held in 2012 - saw some 30 union leaders visit MTQ Engineering.
