SCHEMES TO BOOST PRODUCTIVITY

SCHEMES TO BOOST PRODUCTIVITY:

(Skills enhancement for older workers): 1.

Mdm Ho Geok Choo asked the Minister for Manpower (a) how will schemes to boost productivity be implemented and who will implement them; (b) how will the indicators of success for these schemes be measured; and (c) how will the Ministry ensure that older workers are not replaced for the sake of boosting productivity.

2.

Assoc. Prof. Paulin Tay Straughan asked the Minister of Manpower (a) if he will elaborate on the implications of the Economic Strategies Committee Report on older workers, especially with regard to the automation and mechanisation drive; and (b) what are the incentives for employers to invest in training and skills enhancement of older workers.

The Minister for Manpower (Mr Gan Kim Yong): Mr Speaker, Sir, the Economic Strategies Committee has recommended a major shift of our economy towards productivity-driven growth, rather than through the expansion of our workforce, so as to bring about higher incomes and a better standard of living for our people. To do so, we will need to restructure our economy to provide more room to grow and to grow more efficiently by having

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more productive enterprises, leveraging on innovation, optimising the use of resources and upgrading the quality and skills of our workforce. Contrary to the perception that improving productivity will result in job losses, productivity improvements can in fact help our economy and our enterprises remain competitive and save jobs for our workers – young and old, men and women, rank and file workers as well as Professionals, Managers, Executives and Technicians (PMETs). Raising productivity will also strengthen Singapore's position as an attractive investment location for growth industries. This will in turn create more quality jobs for Singaporeans. Specifically for older workers, despite the severe downturn in 2009, they have maintained their employment rate at 57% for those aged 55-64. The Government will continue to work closely with the Tripartite partners in preparing employers and employees for the re-employment legislation which will come into effect in 2012.

Let me share with you an example of how older workers can benefit from the productivity drive and automation. Hai's Pte Ltd, which specialises in the production of pre-mix and premium sauces for the food service industry, redesigned its jobs across the entire production process with the deployment of semi-automated equipment. The result is an improvement in productivity of its mature workers by as much as 30%, and the tasks are now physically less demanding and easier to handle. The mature workers can also apply different skills and talents through functional job rotation, and gain new skills through training. They have become more motivated at work and the company can now offer more job opportunities for mature workers as it expands its operations. Even as companies redesign workplaces, processes and jobs to create higher value and better leverage on the silver workforce, workers need to play their part by picking up skills and actively

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upgrading themselves to take on higher value jobs. The Government will continue to support the efforts of employers and workers in skills upgrading, especially for the low-wage and low-skilled workers. More details will be announced shortly.

Mdm Ho Geok Choo has asked about schemes to boost productivity. Details will also be announced shortly.

Mdm Ho Geok Choo (West Coast): Thank you, Minister for the very comprehensive response. Sir, the whole notion of productivity is about more output and better rewards. How do we reconcile this with the perception that older workers are less energetic and slower, and hence, to be pro-business, we need to reduce their compensation and rewards in two areas? Upon reaching 50 years of age, older workers face a reduction in CPF contribution and upon retirement, if they are found to be fit for re-employment, they are often re-employed at a reduced package. How we reconcile productivity with incentives in this instance? I would like to have Minister's comment on this.

Mr Gan Kim Yong: Sir, the tripartite partners and the Ministry of Manpower have been working over the last few years to encourage our employers to adopt flexible wage systems that reflect the performance of our workers. We have also been working with the unions to encourage our workers to accept these arrangements and therefore, if our workers are able to be compensated according to the performance, then the seniority wage system will become less of an obstacle to older workers staying employed.

At the same time, the tripartite partners have also been working very hard to upgrade the skills of our workers to ensure that their skills remain relevant to the industries that are created. By doing so, we will ensure and help older workers

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share and benefit from economic growth. Later on, Minister for Finance will announce additional measures on how we can help these older workers go for training and upgrade themselves so that they can remain productive, enhance their performance and have a share of the profits of the company, so that we can also see their wages improve over time. There is no easy answer to this challenge. It is important for all parties to work together. The Government will provide the necessary schemes. Companies and employers will have to recognise the contributions by older workers and design their compensation according to the performance of the older workers. The older and low-skilled workers, themselves, also have to put in the effort to upskill so that they can take on higher value jobs.

The Minister of State, Prime Minister's Office (Mr Heng Chee How): Mr Speaker, Sir, supplementary question. I would like to ask if the Minister would agree that there are also many employers out there who do appreciate the value of their older workers and what they bring to the job and the company. In last year's economy, for example, the employment rate for the older workers actually went up. The results for the unionised sector, for example, have also been very good.

Mr Gan Kim Yong: Yes, I agree, Sir. In fact, in my reply earlier, I did mention that the employment rate for older workers in 2009, despite the recession, maintained at 57%. This is encouraging but it still requires us to continue to put in more effort to help prepare our workers for the re-employment which will come into effect by 2012.

The tripartite partners have been working together on this and we will be rolling out tripartite guidelines on re-employment shortly. We have put out the

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draft guidelines and we are now consulting and getting feedback from our stakeholders. We will refine this set of draft guidelines and the finalised guidelines will be rolled out shortly.

Assoc. Prof. Paulin Tay Straughan (Nominated Member): Thank you, Sir. I have three supplementary questions. The first is in regard to an elaboration, if Minister could, to tell us a little about the incentives that the Ministry has in place to encourage, particularly, SMEs to provide training for older workers who are nearing retirement, 62 years old, and who may want to continue employment.

My second supplementary question, Sir, relates to the new national council that will oversee productivity and CET. I wonder if the Minister could share with us who will constitute members of this new council. Will there be representation from the people sector, interest groups, particularly those who have vested interests in mature workers and their interests and rights?

And my final supplementary question – there is a lot of emphasis on training to level up on skills. May I ask if training will be held within office hours to encourage a good worklife balance?

Mr Gan Kim Yong: Mr Speaker, with regard to the incentives for SMEs to train older workers – we have the ADVANTAGE! Scheme that allows companies to tap on this scheme to prepare themselves for the employment of older workers. The ADVANTAGE! scheme has a programme "ADVANTAGE! for SMEs", which is targeted specifically at training SME employees especially the human resources managers so that they understand the challenges of the employment of older workers. Specific incentives to encourage the training of older workers, as I have mentioned, will be announced shortly.

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The composition of the National Productivity Council (NPC), that the Member has mentioned, will also be announced in a short while. Finally, the Member talked about worklife balance and how we balance it with the need to go for training. It is something that we need to continue to work at. We want to ensure that we achieve worklife balance so that workers can be productive and at the same time we want to encourage workers to go on for training. So, particularly for the older and the lower-wage workers, the obstacle for training is quite substantial and significant. That is why, in a short while, Minister for Finance will be announcing specific incentives or how we can encourage older workers to overcome these training obstacles and go for training.