Sir, employers often reminds us that the cost of doing business in Singapore is high compared to various other countries. Many are also quick to add that wage cost is a significant proportion of that business cost. It must be so, because so many companies resorted to retrenching workers to cut costs in the downturn.
And notwithstanding signs of an economic recovery, future conditions are more likely to be unpredictable than plain sailing. Hence, the need to manage all cost categories, and from the workers’ perspective to save jobs, must surely be a perennial business requirement rather than an option.
Against this background, one would have thought that as flexible wages help companies align their wage cost to demand conditions more smoothly, the idea would be embraced immediately and without reservation. Far from it. Many still resist.
Now, if resistance had come only from workers, at least it would be understandable and can addressed. For workers who had been used to fixed wages, wages that bear no relationship on a monthly, quarterly or annual basis to the performance of their companies, moving to more flexible arrangements would raise concerns.
These include: how would I know that the company would not take me for a ride? Is there openness in information sharing? What are the performance indicators, and what difference can I make to them through my work? Is the appraisal process fair and transparent? And in exchange for the flexibility, what exactly is the upside to me in all these – do I earn more when the company does well? Do I reduce my risks of retrenchment?
When your pay and job security becomes dependent on various factors, you naturally become concerned about openness, fairness and transparency. And indeed all these aspects would have to be properly addressed as companies customize and implement flexible wage systems for themselves. That is fine.
What I find much harder to accept is the resistance from companies. Some say that they don’t see the need, still banking on the Government to come to the rescue with a CPF cut if the need arise. Others say that they don’t know how to do it. Yet others say that putting in a flexible wage system is itself a complexity and rigidity that they can do without.
Those who basically say that without clearly specifying a flexible system, they enjoy the greatest flexibility of all because they can do as they please when the time to cut pay and heads comes must be prodded to play it fair and be more responsible as corporate citizens.
Workers are not machines. While they understand that in this age of global competition there is no longer any point in dreaming about iron rice bowls, they do expect that the companies they work with deal with them fairly and with integrity. They are not against co-sharing risks and rewards with their companies in a more uncertain environment. But they will surely resent being taken for a fool, and be at the receiving end of “head-you-win, tail-I-lose” arrangements.
Adopting an opaque, use and throw attitude in personnel management is not only callous but actually works against the interests of shareholders because of the negative consequences that such intended uncertainty has on morale and productivity.
I therefore applaud the efforts on the Tripartite Committee on Wage Restructuring in trying to achieve more concrete progress in this matter.
I would like the ask the Minister to give an assessment of the status of these efforts so far, and in particular what steps are his Ministry taking to move the broad spectrum of employers toward purposeful action. I would also like to ask the Minister whether he expects the economic recovery to cause a loss of interest on the part of companies in this matter, and if so, what steps are his Ministry taking to sustain the focus, momentum and progress.
