DECLINING LABOUR PRODUCTIVITY

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DECLINING LABOUR PRODUCTIVITY: 3.

Mdm Ho Geok Choo asked the Acting Minister for Manpower given the declining labor productivity that has been in the negative for the last three quarters, especially in the manufacturing sector, what is the Government doing to address the declining labour productivity.

The Senior Parliamentary Secretary to the Acting Minister for Manpower (Mr Hawazi Daipi) (for the Acting Minister for Manpower): Sir, for the first three quarters of 2008, labour productivity declined as the slowdown in economic growth was outpaced by job creation. Employment typically lags output, as given their sunk costs in recruiting good workers, companies begin to cut back on hiring only when it is clear that the decline in output reflects a sustained slowdown rather than a short-term blip.

Labour productivity in the third quarter of 2008 contracted by -9.6% compared

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to the same period a year ago. Over the second half of 2008, the sharp decline in output and economic growth has made employers cautious about hiring. Many have frozen headcount already but most are still retaining their excess workers. While we cannot buffer Singapore fully from the global economic crisis, there are measures which we can take so that companies can strengthen their competitiveness and emerge stronger when the economic situation improves.

To help companies raise their productivity, we have a three-pronged strategy:

(i) investing in training of our workers;

(ii) helping companies take advantage of the higher skills of their workers through job redesign; and

(iii) encouraging companies to improve their productivity through investments in technology, processes as well as innovation.

On training, the tripartite partners have launched the Skills Programme for Upgrading and Resilience (SPUR) on 1st December 2008. SPUR leverages on the comprehensive CET infrastructure to equip workers with relevant skills that can be applied in a job immediately, so that they can advance in their careers, and remain competitive. SPUR provides enhanced course fee support and absentee payroll for employers and covers over 800 courses. However, the availability of training infrastructure and funding support can only be fully leveraged if there is a mindset change on the part of workers – to be more open minded about new jobs and constantly upgrade their skills or equip themselves with new skills to remain relevant in the workforce, given the uncertain economic outlook. I therefore urge all employers to work with WDA and send their workers for training, so that both workers and

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employers will be able to ride out the difficult times together and sharpen their competitiveness.

The Government will continue to support companies to upgrade their capabilities to undertake higher value-added activities and invest in technology and innovation for greater productivity. For example, since April 2008, the Government has injected another $20 million into SPRING's Local Enterprise and Association Development (LEAD) programme to support new industry associations, while enabling existing associations to embark on new initiatives such as feasibility studies of new markets and strategic planning for the industry. Such investments will ensure that our companies continue to retain their competitive edge during this period of economic uncertainty.

Mdm Ho Geok Choo: I thank the Senior Parliamentary Secretary for the comprehensive answer. I have just four points to make.

Mr Speaker: Four points or four questions? Are you making a point or question?

Mdm Ho Geok Choo: I have four questions to ask. Sorry. First, aside from the retraining programme, such as SPUR, does MOM have any other schemes to address the likely growth of surplus labour arising from retrenchments layoff?

Second, assuming that it takes some time, even with a SPUR qualification or any other new qualification, before jobless workers find employment, does the Government have any schemes to offer interim employment for these workers, such as interim housing which HDB has come up with.

Third, the question really has got to do with the point the Senior Parliamentary

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Secretary made about mindset change. Yes, we really need to change the mindset of workers with regard to retraining and accepting new jobs. But is there a scheme to subsidise and put these people through a mindset change programme which, for some time in early 2000, was actually very much promoted by some of the professional associations but they never had any form of subsidy or support from the Government.

Lastly, with regard to the likely surplus labour that we may be seeing, does the Ministry have a profile as to who they are in terms of their gender, age and nationality?

Mr Hawazi Daipi: Sir, let me answer the first two questions first.

MOM, together with our tripartite partners, NTUC and SNEF, released the tripartite guidelines for managing excess manpower on 19th November 2008 to encourage companies to adopt flexible work arrangements to help contain cost as well as to avoid retrenchments. We would like companies to delay retrenchments, if possible, and the strategy is really to help companies manage the cost and also to enhance their competitiveness through training of their workers, among others.

The response has been very encouraging with over 90 companies already implementing the recommendations in the guidelines. Other companies have also indicated that they will consider various alternatives to retrenchments.

Our focus is on enhancing employability of our workers and to inform workers of the areas and the sectors with good growth prospects. For the retrenched and unemployed, MOM and WDA, as well as the unions, have been working closely with companies to help them find suitable jobs. We have

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enhanced the job matching capabilities of career-linked centres or career centres by building a comprehensive job bank with jobs sourced from industries, as well as economic agencies such as EDB.

Locals who are retrenched or unemployed may also be eligible for a training allowance when they enrol for training under SPUR. We will continue to monitor the labour market situation to see how best to help workers who may be adversely affected by the economic downturn.

As an additional point, our career centres have worked quite hard to help retrenched workers find alternative jobs. In October 2008, eg, close to 1,100 workers were placed in jobs. And in November, more than 1,100 workers found jobs through our career centres.

On mindset change, yes, our CDCs, as well as e2i, run by NTUC, provide soft skills for workers to help prepare themselves for the employment that may be available to them, apart from training them in specific skills, so that will be useful to help workers prepare mentally for the different jobs that they may undertake after completing the job.

On profile of retrenched workers, this is ongoing. We are bracing for more difficult times. We will collect the necessary information and see how we can address the issues later on.