Speech at 28th FDAWU-SHA-NTUC Productivity Seminar cum "Employee of The Year” and “Productivity Idea” Awards Presentation Ceremony

Mr Lee Yi Shyan, Minister of State for Trade , Industry and Manpower, Orchard Hotel

Mdm Kay Kuok, President, Singapore Hotel Association

Mr Heng Chee How, Deputy Secretary-General, NTUC

Mr Abdul Subhan, President, Food, Drinks and Allied Workers’ Union

Distinguished guests

Ladies and gentlemen

Introduction

1. Good afternoon. Thank you for inviting me to this year’s Productivity Seminar and Presentation Ceremony for “Employee of the Year” and “Productivity Idea”.
   
   Hospitality sector poised for strong growth
2. We left behind 2009 and ushered in a strong first quarter 2010. Last week, MTI announced that the Singapore economy expanded by 15.5% year-on-year in the first quarter of 2010, and a spectacular 38.6% quarter-on-quarter. This strong momentum was broad-based, driven by both the manufacturing and services sectors.
3. In particular, the hotel and the food and beverage industries sector grew by more than 12% quarter-on-quarter, bolstered by new and exciting developments in our tourism landscape, such as the opening of the Integrated Resorts. In fact, visitor arrivals in April rose 20.4% year-on-year, to an all-time record high of 938,000. The outlook for the tourism-related sector seems bright for now.
   
   Enhancing productivity to sustain long-term growth
4. Even as we prepare for larger number of tourists, stronger demands and higher sales turnover, we should remain mindful of the challenges ahead. With robust economic recovery, we can expect a tighter labour market. Currently, our hotel, food and beverage (F&B) and retail sectors employ about 330,000 workers. A 10% increase in headcount would mean 33,000 workers. The question is whether there are better and more productive ways to utilise our manpower so that we can produce more with the same or even less labour input.
5. This leads me to the various initiatives introduced in Budget 2010 to encourage firms to raise productivity. We have to transit into a phase of productivity- and innovation-led growth, instead of a labour-led growth that we have seen in the past few years. The National Wages Council’s recent announcement made the same call - that there is a pressing need to raise productivity to ensure that wage gains are sustainable. In this respect, wage increase should lag productivity gains in the long term.
6. We need to tackle the issue of productivity extensively – at the national, sectoral, enterprise as well as the worker levels. At the national level, the National Productivity and Continuing Education Council will coordinate the national productivity drive and oversee the development of a first-class national Continuing Education and Training (CET) system. This will be the “hardware” for our productivity drive, and the Council will focus on 12 priority sectors for a start, including the hospitality industry. In addition, the Council will also seek to create the “heartware”, which is about fostering a culture of productivity as well as continuous learning and upgrading amongst Singaporeans.
7. At the sectoral level, industry associations will play a huge role in identifying opportunities for collaborations to improve the efficiency of supply chain, establish common outsourcing opportunities, realise economies of scale, adoption of minimum standards and best practices, as well as training and upgrading of workforce skills specific to the sector. Business associations can also work with relevant agencies such as the Singapore Workforce Development Agency (WDA), SPRING, Singapore Tourism Board and IE Singapore to improve the collective competitiveness of the industries.
8. At the enterprise level, companies will be on the driver seat. It must take initiatives to innovate and compete more effectively. It must invest in technologies and optimise its use of manpower. It must benchmark against the most competitive firms in the industry and try to exceed them.
9. Consider the example of Orchard Hotel’s “Workforce Optimisation System”, which is an electronic roster that can deploy staff to functions where they are most needed. This roster also integrates information on the employees’ annual leave and payroll systems so that allowance calculations are done electronically. By doing so, the hotel teams are now able to work more efficiently. I understand that other hotels are also exploring this initiative. Such initiatives could potentially be supported under the newly introduced “Productivity and Innovation Credit" scheme.
   
   Better skills and high service levels boost productivity
10. Investing in sophisticated IT and backend system is good, but it is only half the story. Enhancing the skills of every worker is the other half, as far as boosting productivity is concerned. WDA has partnered accredited organisations to offer training courses to upgrade workers’ skill sets, so that they can take on more complex and higher value jobs. This is critical to ensure sustained wage growth for workers. WDA will be happy to work with hotels to upgrade the skills of their workers.
11. Consider the example of Holiday Inn Atrium Singapore, which piloted an initiative to cross-train selected employees in the food and beverage department. The objective was to deploy them to various outlets during peak periods. This move has resulted in an increase in productivity as the amount of time needed to serve one guest has been reduced by about 7%. The working arrangement became more flexible, their employees gained wider skills and their guests were more satisfied. Five members of the group were also promoted for their exemplary service.
12. Another important measure of productivity for the hospitality industry is the level of customer satisfaction. The S$100 million GEMS Up movement, comprising a key segment called the Customer-Centric Initiative (CCI), was launched in 2009 to raise service excellence in the hospitality, F&B and retail industry in a fundamental and sustainable way. Many hotels have come onboard and I hope more will follow suit. As co-chairman of CCI, I would also like to take this opportunity to encourage hotel operators to consider expanding your service offerings and improve your service standards by tapping on resources such as the CCI.
    
    Conclusion
13. Today, we will have the pleasure of honouring many workers who have done well in raising their productivity at the workplace. We recognise their contributions with the Singapore Hotel Association’s “Employee of the Year” award. The award signifies the importance the hospitality industry places on individual initiative and empowerment.
14. One fine example of personal commitment to productivity is Mr Yeo Ing Jye, a chef de partie in Park Hotel Clarke Quay. Mr Yeo created standard templates to facilitate the purchasing process of raw materials when the hotel migrated to an electronic purchasing system. His initiative has reduced the data entry processing duration and has improved the overall efficiency and productivity levels by as much as 75%.
15. Besides Mr Yeo, there are many of you who are working quietly and persistently to initiate productivity improvements at your workplace. I want to take this opportunity to commend your commitment and passion. I would also like to wish you a rewarding journey ahead, in getting your fellow colleagues onboard our common journey towards innovation and service excellence. My heartiest congratulations to all the winners.
16. Thank you.