27 March 2012

Let’s help every Singaporean to move up

27 March 2012

Mr Tharman Shanmugaratnam, Deputy Prime Minister, Minister for Finance & Minister for Manpower, made a speech last Tuesday at the Singapore Business Awards 2012, calling on companies to build greater inclusiveness in their operations. Here is an excerpt:

We are seeing a slowdown in our economy this year. However, it comes after a strong recovery from the global crisis of 2008-09. The labour market therefore remains tight and unemployment is low.

There remain major uncertainties in the global economy. However, our key task must be to press ahead with restructuring our economy so as to sustain growth over the longer term and raise the incomes of our workers.

We have to invest more in our workforce, in every industry, and make high skills and business innovation our key competitive strengths. We have to create better jobs and entrench a culture of learning and skills upgrading at all levels of our workforce. We are not there yet.

There is no reason to believe that industries that have relatively low productivity today will remain that way. In fact, industries such as construction, F&B and the retail sector, where productivity has lagged the most, are also the areas which have the most obvious and greatest scope to improve. Their productivity levels remain far below the best practices internationally, or in Tokyo and Hong Kong. 

We must make a determined effort in this decade, to upgrade these sectors and enable them to be vibrant players in the Singapore economy even as our labour market remains tight. It can be done. And we can surely achieve this, if businesses, industry associations and government work together to achieve this transformation. We must borrow every lesson on how productivity has been raised in other countries, develop our own ways to improve processes or develop new and higher value offerings, and take advantage of every government scheme to upgrade.

Raising the quality of jobs and productivity is the only sustainable way to hold our own in the international marketplace, especially as China and other emerging players move up the value chain. It is also the way we can raise incomes for all Singaporeans, and build an inclusive Singapore.

In this year’s Budget, we have made significant enhancements to measures to help businesses, and especially our SMEs, to make the transition to high productivity. We will work proactively with our business chambers and trade associations to help our smaller players take full advantage of these measures.

Making Business Inclusive

Our overarching objective is not economic growth in its own right, but higher incomes and a better quality of life for all Singaporeans. Both the economic and social measures in this year’s Budget are aimed at achieving an inclusive Singapore. We are introducing further initiatives, building on the significant moves we have made in recent years, to help lower- and middle-income Singaporeans do well. We are providing greater economic security and care for the elderly, and for Singaporeans with disabilities.

But building an inclusive society is not just about government redistributing resources to help those in need. That is a necessary and important role for government, but it is not what makes a truly inclusive society. We all know that. We can only be an inclusive society if employers treat their workers with respect, help them develop themselves, and reward them fairly. When Singaporeans actively participate in causes that will make this a better society. And when the more successful step forward to help others in the community because they feel it is their responsibility to do so. An inclusive society is about this engagement amongst fellow citizens, so that we can help everyone move up together.

As corporate citizens, you therefore play a major role – both with regard to your employees, and, as stakeholders in society, with a responsibility towards the broader community.

We must ensure that Singaporeans remain at the core of a diverse and competitive workforce. To do this, companies must actively look out for and groom local talents. We have to provide them the necessary exposure, training and career development opportunities, so that every Singaporean can maximise his or her potential. It is also how companies can build lasting competitive advantage, an advantage that rests on a skilled and experienced core of Singaporeans even as we bring in expertise and skills from abroad.

We have to get this balance right. We must stay open to expertise and knowhow from around the world so that our companies can have the diverse teams that allow them to remain competitive. That’s how we have grown many more jobs for Singaporeans themselves, and enabled most Singaporeans to do well. We should not give up this strength. But we must at the same time ensure that we maximize every Singaporean’s potential, and develop the local capabilities that have to be at the core of Singapore’s sustainable advantage in the world.

Our business leaders must also take a more involved approach in understanding and addressing the challenges faced by those in the lower rungs of the workforce. Think of how to improve every job – no matter how simple, invest it with more skills, train up our workers to do the job well. Think of how you can give them a fair share of productivity gains.

Many of our businesses already do so. They find it improves morale, reduces attrition and attracts people to the organisation. But creating better jobs and giving workers a fair share of productivity gains is also part of the broader culture of responsibility that businesses must share in as we build an inclusive Singapore.

Companies must also do more to redesign jobs to meet the needs of our older workers.  What we face is not just a tight labour market where older workers are a useful resource, but also the reality that older Singaporeans are fitter, increasingly skilled and keen to contribute workplace for longer.

We are not the only economy facing this demographic challenge. Much like us, Germany has been experiencing a declining fertility rate and an ageing population. They have seen how companies have begun to adopt a different approach towards older workers. Recent surveys in Germany show a significant shift in attitudes towards older workers within the space of a decade, on the part of both employers and the public.

German employers now view older employees as valuable members of their workforce, and are putting in more effort in retaining them and maximizing their contributions. In one example, researchers found that older workers in a Mercedes assembly line were more productive than their younger counterparts. The reason for this was that experienced older workers made fewer mistakes, and were able to resolve unexpected problems more effectively.

We need to make a determined effort to eliminate age-based discrimination. I would like to urge businesses to hire fairly based on the merits and experience of the candidate. And to put in extra effort to harness the full potential of Singapore’s older workers. They may start slower or be a little unfamiliar with a new job, but if they are treated well and know the employer is going out of his or her way to make the job suit them, I think we will be surprised by what we find – the motivation, skills and the way older workers respond when given the opportunity. That’s what happened in Germany.

Responsibility to the community

More companies have brought social responsibility into their mission statements. It’s a heartening trend. They believe that corporate social responsibility, or CSR, is not a zero-sum game between a company’s profits and costs. In fact, CSR can generate long-term benefits for businesses by enhancing brand image, as well as provide avenues for strengthening employee engagement and leadership development. More importantly, it sends a signal to the community about how the more successful in our society feel for their fellow citizens and take responsibility for strengthening our society.

One aspect of CSR is corporate philanthropy, which has been steadily increasing over the years. In 2010, about half a billion or $507 million came from corporate donations. This is almost double the figure in 2001. But we are still some ways behind several of the developed countries. For example, corporate giving as a percentage of GDP in Singapore is about half the level that it is in the United States. 

I would like to encourage companies to build on what we have achieved so far and develop corporate philanthropy in various segments of our community, working where necessary with VWOs and the Government. Put some thought into areas you would like to contribute to – not just financially, but by taking ownership over some part of community improvement.

Some of our companies are now giving their employees a day or more of paid leave to volunteer at a charity of their choice. Cerebos is an example. It has also put in place a scheme where its employees can leave an hour earlier each day to exercise, and for every exercise session each employee engages in, even on weekends and off-days, Cerebos donates $5 to the Straits Times Pocket Money Fund.

Our growth must help improve the lives of all Singaporeans, for it to be meaningful. 

Our local talents must be developed and stretched to their fullest potential, every worker must have the prospect of improving his or her income, and every Singaporean the opportunity to contribute to a stronger and better society. I encourage our companies to play their full roles as stakeholders in an inclusive Singapore.  

Tharman Shanmugaratnam
Deputy Prime Minister, Minister for Finance & Minister for Manpower 
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