Productivity
Over the past decade, Singapore’s economy grew by an average of 5% per annum. Singapore’s productivity growth over the same period averaged about 1% per annum, a rate on par with that of other developed countries. The broad majority of Singaporeans also enjoyed real wage growth and a rise in living standards.
Nonetheless, productivity gains have declined in recent years due to heavier reliance on labour inputs to generate economic growth, especially inputs of foreign manpower. Globalisation, increased competition and lack of relevant skills have also led to slower wage growth for low-wage workers.
Only productivity-driven growth can deliver sustainable and inclusive economic development, and improve Singapore's standard of living over time. The Government will focus on productivity as a system and how employers can grow their companies without increasing their manpower at the same rate. This involves a mindset shift. Improving productivity is:
- Not about workers working longer hours; or
- Not about workers doing the same tasks faster and more cheaply;
- About working smarter – more efficiently, more effectively and more innovatively.
National Productivity & Continuing Education Council
As announced in Budget 2010, a high-level National Productivity and Continuing Education Council (NPCEC), chaired by Deputy Prime Minister Teo Chee Hean, is established to galvanise the nation to step up its efforts to boost skills and enterprise productivity, and develop a comprehensive system for continuing education and training.
The NPCEC, with representatives from the Government, business community and labour movement, will oversee the work of the different government agencies and promote close collaboration amongst the business sector, workers and unions, and the public sector.
MOM-MTI Joint Taskforce on Productivity
The Inter-Agency Productivity Taskforce was set up in February 2009 to examine the problem of declining productivity in the services sector. It is jointly chaired by the Ministry of Manpower and Ministry of Trade and Industry, with members from SPRING Singapore, Singapore Tourism Board, and other government agencies.
The Productivity Taskforce has identified three services sectors to focus on – retail, hospitality as well as food and beverage. In 2008, the combined output of these three sectors was $10.4 billion and total employment was 320,000. With these three sectors expected to gain momentum in the medium-term, productivity growth is important so that the sectors can continue to flourish in a sustainable manner.
The aim of the Taskforce is to develop a framework for raising enterprise productivity in the services sectors and work with companies to address their productivity challenges in a holistic manner. Through engagement and dialogue with local and overseas companies, the Taskforce will spearhead the productivity drive in the three sectors with the same four strategies described above, ie.:
- Establishing Research and Benchmarking
- Raising Service Excellence
- Increasing Innovation
- Enhancing HR Management
(A) Establishing Research and Benchmarking
Benchmarking is a key tool for companies to compare
operations-specific productivity indicators with their competitors so
that they can identify areas for improvement. More research in the area
of services productivity is needed to develop new tools to enable
companies to improve their operations and processes.
(B) Raising Service Excellence
Good service is service that is both effective and efficient. To
deliver excellent service, companies need not necessarily turn to more
manpower. Instead, companies can focus on the delivery of higher
value-add services through better service processes, by examining their
entire value chain to identify areas for improvement.
(C) Increasing Innovation
Technology and innovation are key factors in driving productivity
growth, be it through improvements in processes or the introduction of
new products and concepts or even the way of getting things done.
(D) Enhancing HR Management
Three manpower strategies are critical to productivity improvements –
redeploy, retrain and retain. Companies can optimise productivity
through more efficient deployment of their manpower, by better matching
manpower resources to business demands across different job functions,
across time periods and by implementing flexible work arrangements.
Companies must also invest in the skills of their workforce, such as
multi-skilling their workers to be more flexible and productive.
Companies must also redesign jobs, put in place proper career pathways
and good HR practices to retain staff and reduce turnover.
Key Sectors for Productivity Drive
The Productivity Taskforce has identified 12 priority sectors to focus on. They include:
- Construction
- Electronics
- Precision Engineering
- Transport Engineering
- General Manufacturing
- Retail
- Food & Beverage
- Hotels
- Healthcare
- Info-comm
- ]Logistics and Storage
- Admin and Support Services
These 12 sectors have the greatest potential for productivity enhancements, contribute to a significant share to GDP and employ a large number of workers. With these sectors expected to gain momentum in the medium-term, productivity growth is important so that the sectors can continue to flourish in a sustainable manner. Work groups are formed for each sector, comprising representatives from Government agencies, unions and the private sector, to study and develop strategies to raise productivity for each specific sector.
