Speech by Mr Lim Swee Say, Minister for Manpower at the HCP Conversations Event

10 Oct 2017Speeches

Distinguished Guests, Ladies and Gentlemen,

Good Morning.

Early this year, we launched our Human Capital Community with the pioneer batch of 74 HC Partners. Today, we welcome the second batch of 56 progressive employers to our HC Community.

They include SMEs and MNCs, and come from a variety of sectors such as financial services, food services, hotel & accommodation, manufacturing and professional services. Together, we now have 130 HC Partners, employing about 130,000 locals. i.e. more than 5% of our total local workforce.

This is an encouraging start for our HC Community which is less than 1-year new.The development of human capital is critical to our future growth.

Due to ageing and low birth rates in our region, the United Nations Population Division projects that the working-age population (those aged 15 to 64) in Japan, South Korea and Hong Kong will decline by 0.5% to 0.7% annually over the next decade up to 2025.This will happen in Singapore too.

Our resident working-age population is projected to stagnate before the end of this decade, a reversal from the 1.3% annualised growth from 2005 to 2015.¹

Against this backdrop, simply put, there are three scenarios for the future development of our Singapore Workforce. First, we take in more foreigners to make up for the slower growth and eventual decline in local manpower. But this will make us overly dependent on foreign manpower for our future growth and progress. This is not a good choice.

Second scenario is to allow slower manpower growth to become the bottleneck of our future growth. But if economic growth can only be equal to manpower growth, we will end up with eventual economic stagnation when our local workforce stops growing. Again, this is not a good choice. The only good choice we are left with is the third scenario: to find ways to ensure that our future economic growth can be higher than our future manpower growth.

This means having to innovate with technology, improve our productivity and be more manpower lean. This is indeed the growth scenario we are pursuing: 1% manpower growth but 3% economic growth, by making up for the growth gap of 2% through productivity gains. i.e. 1 + 2 = 3.So far, we are progressing on the right track.

Manpower growth has slowed from 4% in 2011-2014, to 2% in 2015 and 1% in 2016. We are indeed becoming more manpower lean. At the same time, labour productivity has improved from 0% in 2011-2015, to 1% last year. We have become more productive.

Even so, there is still much we need to do before we can truly succeed as a future economy of 1 + 2 = 3. We have to make sure our future economy will not only be more innovative and our future workforce more productive, but our future growth must also be more inclusive.

The three (innovative economy, productive workforce and inclusive growth) must go hand-in-hand. I am therefore encouraged that our HC Partners are pursuing all three in a more holistic manner. Let me cite a few examples.

To be more inclusive of employees who need flexible and supportive work arrangements, The Lo & BeholdGrouppractices 5-day work week which is seldom seen in the F&B industry. It also offers FWA to employees who need them.

Ms Lynn Hou wanted to pursue a part-time diploma in e-Commerce. The company adjusted her work schedule and reduced her workload by 20%. With the support of her employer and fellow workers, Lynn managed to juggle her studies with work commitments, and was promoted to Senior Captain this year.

To be more inclusive of workers whose current jobs are more disrupted by technological change, DBS retrained them to take on new jobs through intra-company PCP offered by WSG. For example, staff in customer-facing roles are trained to provide virtual assistance to customers through new digital channels such as Video Teller Machines.

To be more inclusive of young and inexperienced job entrants, Citibank offers Earn and Learn, 12-week internship, 5-month mentoring programme etc to train and groom local university students and graduates fresh out of school. It has done so year after year, batch after batch, producing many promising talents for the bank, and our finance industry too. To be inclusive of workers made redundant by other companies and industries, ExxonMobil takes in mid-career hires, who may not have direct experience, and help them switch careers with the company. This year, ExxonMobil tapped on WSG’s Professional Conversion Programme (PCP) to hire 11 mid-career PMETs for chemical manufacturing. It plans to recruit another 20-30 PMETs next year through this PCP.

To be more inclusive of mature workers, Gardens by the Bay hired Mr John Loh at the age of 72 as a Procurement Executive, promoted him to Procurement Manager at the age of 75, and Senior Procurement Manager this year at the age of 77.

Beyond strengthening HC within their organisations, we are also encouraged by the proactive efforts by some HC Partners to help spread progressive HC practices in their industry. One good example of identifying future skills and building up our local pipeline to take on these future roles is Jurong Port.

It piloted a competency-based career progression framework last year to multi-skill its Equipment Specialists so that they can operate a variety of equipment catering to different types of cargo. This has enabled them to enjoy better wages and career progression as they deepen and broaden their competencies. This framework is now being extended to other job functions, such as Port Operations and Safety & Health.

To support industry-wide capability development, Jurong Port launched the Jurong Port Academy in January to enhance capabilities, increase productivity and equip port workers with skills for the future.

The programmes are made available not only to Jurong Port employees, but also port users and even industry partners, thereby helping to build a stronger local core for the future development of the industry.

There are more good stories and examples we know of in our HC Community. Sorry that I do not have enough time to share them with you. All in all, I am grateful that our HC Partners are helping to set the pace for progressive and inclusive HC practices in making our workplace

more age-friendly for mature workers,

more family-friendly for parents with young children and children with elderly parents,

more progressive for LWW,

more adaptable for at-risk workers, and

more supportive for displaced PMETs to switch careers.

All these efforts and commitment will help to strengthen our local core, and enhance the complementarity of local and foreign manpower in our Singapore Workforce.

As we work together to grow our HC Community, we are committed to keep on improving our support framework so that we can all do more and make greater strides in the development of our local human capital. This morning, I would like to share a new idea with you. The transformation we are going through in Singapore is not local and unique to us, but affects many developed and developing economies globally. My concern is that if we allow our “cheaper” competitors to transform “faster” and become “better” than us, our future will be at great risk. We must never allow that to happen.

We must therefore focus our energy and resources, to keep building new and better capabilities in our economy, in our businesses and in our workers. Most of all, we have to do it better and faster than others because speed is everything in the era of new globalisation. Hence, as we partner you and support you in your efforts to nurture our workforce into one that is more innovative, productive and inclusive, we would also like to enhance our partnership with you to nurture our workforce into one that is more capable too.

Looking back, one reason why we were able to learn fast and move fast was because we embraced an “eclectic” mindset. We learnt from the experience and expertise of others out there in the world, and packaged and adapted them into something better and more suitable for us.

Our ability to learn fast and adapt well has brought us much success, from ThirdWorld to First. Looking ahead, to compete in the premier league of future economy, we need to embrace this “eclectic” mindset even more. It is simply not possible for any economy, corporation and workforce to be self-sufficient in the fast changing world of technology, innovation and competition. We have to build new capabilities that will be in greater demand in the future but are currently lacking or in short supply here, as quickly as possible.

We believe that the scope for us to speed up the transfer of advanced and emerging capabilities from other places to Singapore is tremendous, especially so for our local enterprises and industries.

One example is quality interior furnishing. A local leading player aspires to be among the first in Singapore to develop capabilities in Healthcare Interior Furnishing–from product knowledge, installation, care and maintenance. But, our local expertise in this area is currently limited. So we should move fast to bring in foreign experts to train and guide our local staff, and build up local human capital in Healthcare Interior Furnishing for the growing healthcare markets here and in the region.

Another example is in food manufacturing. Singapore has built up an excellent reputation for food quality and hygiene standards. Yet, there are still gaps in our local capability in terms of process technology, product innovation, and labour productivity. Some of our local players have jointly identified the need to transfer overseas know how and expertise in high-pressure processing to our local workforce.

This will help extend the shelf life of food products without using additives or preservatives, thereby bringing our Singapore food brands to more overseas markets. Hence, our local food manufacturing industry is keen to bring in foreign leaders to train and transfer know how to our local workers.

Our furniture sector is another example. According to our industry partners, we currently lack local expertise in using advanced production machinery to reduce human errors and ensure consistent quality. To deep-skill our workers and create better jobs and careers, The Singapore Furniture Industries Council is keen to bring in foreign experts to conduct advanced courses and transfer the capability to our people.

It will not only reduce manual tasks, but also improve the quality and consistency of Singapore-made furniture.

Just one more example before I conclude. Some of our local players in the motor industry see that with increasing popularity of hybrid vehicles, our mechanics will now need to develop new capabilities in hybrid car diagnostics and repair.

The Singapore Motor Workshop Association is therefore keen to transfer such capabilities from overseas to our local workforce. It could improve the productivity of our workshops by 20-30%. More importantly, we will see better quality and safety controls. These examples are not the typical hi-tech or hi-touch sectors that usually attract public attention. And they are by no means thorough or complete.

However, I choose to cite these less obvious examples to make the point that the potential scope for us to transfer know-how and capability to Singapore is broad and can be made more pervasive throughout the economy.

These industry players and partners see the need and the urgency to transfer new capabilities to our local markets and our local workers. Some of them are already doing so through various funding support schemes offered by economic agencies including EDB and SPRING. But there are still some who may need additional support and facilitation. They all deserve our support.

Hence, to help speed up the transfer of capabilities to our local workforce, MOM is piloting a program known as Capability Transfer Programme (CTP). It is to facilitate the transfer of capabilities lacking or in short supply here, to our local workforce regardless of which sectors they are in. Under the pilot, we will assess the merit of each case. We will take into consideration our existing capability gap, and the potential impact of the transfer of capabilities to individual companies and the industry as a whole. We are prepared to provide salary and training support to both the foreign and local trainers, as well as our local trainees.

Broadly speaking, higher support will be given to SMEs than non SMEs. Higher levels of support will be given to the transfer of capabilities to an industry, rather than individual companies. Higher levels of support will also be given to initiatives that has high impact. The funding for salary and training costs will range from 30% to as high as 90%. For example, if companies working together are able to identify a transfer of capability that has high impact to the industry, MOM is prepared to fund up them up to 90%.In cases where our local trainers and trainees need to be trained overseas in a real-world setting, we will provide funding support too. We will also provide work pass facilitation for the foreign trainers if required.

To maximise alignment and effective support to the industry and companies, MOM and WSG will work closely and complement the schemes and efforts of agencies including EDB, SPRING Singapore, STB, IES, IMDA, MAS and JTC. We all share the same objective of speeding up capability transfer by reaching out to a wider base of companies in more sectors, so as to improve the skills and capability, jobs and careers of our local workers.

In conclusion, transforming human resources into human capital starts with a mindset shift. Resource is for consumption and will depreciate over time. Capital, on the other hand, is for investment and can appreciate in value with each passing year, if we do it right. With the establishment of the HC Community, we now have a platform for our tripartite partners to share ideas and best practices with each other, to learn from each other so that we can all do right together.

Let us jointly lead the way to inspire many more companies out there to step forward and grow our HC Community into a widespread movement. Thank you.