TriCom for Low-Wage Workers Calls on Companies to Balance Price Considerations with Quality Factors Such As Accreditation

Updated Tripartite Advisory on Best Sourcing Practices & accompanying Guidebook released to help Businesses Best Source, rather than Cheap Source

30 January 2012

1. The Tripartite Committee for Low-Wage Workers and Inclusive Growth (TriCom) has updated the Tripartite Advisory on Best Sourcing Practices to encourage service buyers to outsource responsibly and adopt best practices when doing so. This is the first update since the Advisory was launched in 2008, and the changes take into account feedback gathered over six months from industry stakeholders, unions, workers and the public.
2. Recognising that service buyers' procurement practices have a direct impact on their outsourced workers, Prime Minister Lee Hsien Loong¹ had expressed the Government's support for best practices in outsourcing. He stressed that outsourcing based on not just price but also quality, was one important way to ensure that low-wage workers benefit from Singapore's progress.
3. The updated Tripartite Advisory on Best Sourcing Practices (See Annex A) incorporates feedback gathered on outsourcing practices, and provides greater clarity on how workers, service buyers and service providers can benefit from adopting the suggested practices. Specifically, service buyers are encouraged to consider the following five principles when outsourcing:
   • Safeguard the basic employment rights of workers;
   • Specify service contracts on the basis of service-level requirements rather than headcount;
   • Recognise factors that contribute to service quality;
   • Seek to establish a long-term collaborative partnership with service provider; and
   • Provide a decent work environment for workers
4. The revised Advisory also highlights service quality factors to consider, such as grading and accreditation schemes, when evaluating the value for money of a service contract. Service buyers are also encouraged to provide incentives to motivate their service providers to improve work quality. By taking a more proactive role in ensuring that their service providers comply with employment laws, service buyers will benefit from better services as their outsourced workers will be more motivated to do their work well.
5. The Ministry of Manpower, the National Trades Union Congress, and the Singapore National Employers Federation have also launched a step-by-step guidebook that explains the business case for Best Sourcing, as well as gives detailed and practical guidance on how to implement Best Sourcing. It includes useful examples of clauses that can be inserted into tender requirements, scoring templates for evaluating proposals from potential service providers and examples of key performance indicators for managing the service provider and is particularly useful for organisations that outsource cleaning, security and landscape services. PDF copies of the Advisory and guidebook can be downloaded for free from the MOM website. Hardcopies can be requested at mr@snef.org.sg or uccw@ntuc.org.sg, and companies may email NTUC's Unit for Contract and Casual Workers (UCCW) at uccw@ntuc.org.sg for queries and assistance in implementing best sourcing. Companies can also look forward to a series of radio advertisements² where the Tripartite partners will be sharing more about best sourcing.
6. Chairman of the Tripartite Committee for Low-Wage Workers and Inclusive Growth, Senior Parliamentary Secretary (Manpower & Education) Mr Hawazi Daipi, welcomed the updated Advisory. He said, "Some service buyers assume that going for the lowest quotes makes good business sense for their bottom line when they outsource their services. What they may not realise is that cheap sourcing increases time spent on managing contract non-performance and the risk of service disruptions. The TriCom calls on employers to do the right thing and adopt best sourcing, to look at service quality factors rather than price. Together with employers, unions, and workers, I am confident we will be able to benefit businesses, outsourced workers and employers through Best Sourcing rather than cheap sourcing. The revised Advisory and Guidebook will also serve to provide practical steps on how employers can implement best sourcing practices for their business outcomes."
7. Director of the Unit for Contract and Casual Workers (UCCW) Mr Zainal Sapari, said, "Outsourcing is increasingly becoming a common business practice for many organisations. It is, therefore important to ensure that outsourced workers will get fair wages and continue to enjoy their statutory employment benefits. The Labour Movement hopes that this Tripartite Advisory on Best Sourcing Practices will give guidance to companies and organisations to create a positive business environment for their customers and service providers."
8. "Best-sourcing can provide the win-win-win approach for service buyers, providers and workers. Best sourcing practices assure service buyers of quality and reliable services delivered by trained workers, who are motivated to excel in their work when they trust their employers to treat them well." Mr Koh Juan Kiat, Executive Director, Singapore National Employers Federation.

¹ During PM Lee's speech at the debate on the President's Address in 2011

² Positive Business Minutes on 938 Live (Feb); Capital 95.8 (Feb)