COVID-19 has laid different paths for many businesses over the past two years.
For some, it created opportunities. Others, challenges.
The latter proved to be true for Swiss Precision Industries (SPI). The global supplier of precision engineering and advanced manufacturing components was severely impacted when the pandemic first started late 2019.
When cases of a then little-known virus with potentially fatal consequences started making its way around the world, supply chains linked to global supplier were disrupted.
Many manufacturing firms worldwide were disabled because of the pandemic, including those in Singapore such as SPI.
With supplies and production dwindling, the company knew it needed to take action to preserve both its business and its some 200 employees’ livelihoods.
Beyond its business objectives, the 50-year-old company also recognised the importance and value of maintaining a competent workforce.
“The past one-and-a-half years has been challenging for us because of the impact of the pandemic. But we have learned to be agile and manage our resources planning to ensure business viability while keeping in mind the welfare of our employees,” said SPI Group Managing Director Adrian Lim.
Not wanting to let go of the people who have contributed to the company’s success over the years, SPI implemented cost saving measures that did not involve reducing their workers’ salaries, in accordance with the National Wage Council’s (NWC) guidelines.
The measures included re-negotiating raw material and sub-contract pricings; initiating a recycling programme with customers to save on packaging costs; implementing tighter controls on production consumables as well as repair/maintenance costs; streamlining its utilities under one utility provider instead of two to benefit from economies of scale.
Since production had dipped and there was a need for fewer manpower, SPI had its employees clock shorter work weeks to help further lower costs.
The shorter work week was achieved by requesting for employees to take a day or two of annual leave weekly, allowing SPI to maintain a constant 50 per cent workforce strength at any given time.
However, despite its best efforts, the toll of COVID-19 on the industry lasted much longer than anticipated, and SPI found itself unable to totally avoid any wage cuts as the pandemic persisted.
SPI is a unionised company under the Advanced Manufacturing Employees’ Union (AMEU), formerly known as the Metal Industries Workers’ Union (MIWU).
As workers livelihoods were at stake, both management and union worked together to hold a series of town hall sessions with the workers before implementing the wage cuts.
“After we had exhausted all non-wage cuts measures, we suggested to AMEU on the implementation of a temporary monthly variable component (MVC) cut. This was something which the company had adopted since 2010, and AMEU was supportive [of the move],” said Mr Lim.
The town hall sessions were used to update the employees on the situation facing the company, as well as to communicate the rationale behind the measures.
Employees were also given the opportunity to raise questions and seek clarifications during these sessions.
“The purpose of the sessions was to engender trust between the employer and employees, and to assure the workers that these cost cutting measures are only rolled out after the management had consulted the union,” said a AMEU representative.
AMEU shared that there were some challenges in convincing employees of the need for the measures, but they understood that they were necessary to keep the business afloat and everyone employed.
The union also facilitated a Job Secondment Programme which helped temporarily redeploy willing SPI workers within suitable positions in companies unionised under AMEU.
The workers were able to gain additional skills during their secondment, and they were also paid their full salaries by the receiving companies during that period.
With the worst now over, SPI shared that its production has recovered to near pre-pandemic levels, and the seconded workers have also since returned to the company.
Despite the challenges faced by SPI, its adherence to the NWC guidelines and close management-union relations has allowed it to weather the pandemic without having to resort to any retrenchment of workers.
Mr Lim shared that though the past year-and-a-half has been tough, SPI has pivoted its business into one that is more agile, and that management-union ties have been strengthened over the same period.
He said: “Agility, constant updates and open communications with all parties are our learning points from this pandemic. These have helped us rebound from the worst.
“SPI has been in business for 50 years and our employees are our assets. Our policies are always revolving around their wages and welfare, especially our lower-wage workers. We believe in developing our potential employees to the fullest to take on higher level of jobs.”
