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Speech at Launch of Human Capital Movement in SMEs

Mr Lim Swee Say, Minister for Manpower , Marina Bay Sands Convention Centre

Distinguished Guests

Ladies and Gentlemen

  1. Good morning. I am happy to join you for the launch of the Human Capital Movement in SMEs.
  2. Let me start with three points on employment situation in Singapore.
  3. First, at nearly 80%, our employment rate is one of the highest in the world.
  4. Second, at less than 3%, our unemployment rate is one of the lowest in the world.
  5. Third, at 1/3 of our workforce, we will have to manage the growth of foreign manpower to be in tandem with that of our local workforce so that we can maintain the current ratio of about one foreign worker to two local workers in our workforce.
  6. Putting the three together, it is clear that the growth of our total workforce will slow from now on, not just in the short term, but the medium and long term as well.  
  7. To sustain profitable growth, businesses will have to be more ready for the future by becoming more manpower lean, strengthening the Singapore Core, and improving the quality of foreign manpower. This applies to SMEs too.
  8. SMEs are a major pillar of the Singapore economy, employing 70% of Singapore’s workforce and contributing to nearly half of our GDP.  We can only truly succeed in our economic transition if you, the SMEs of Singapore, are able to adapt to the new economic landscape.
  9. To succeed, SMEs will need to invest in a whole host of capitals – financial, technology, information, human resource and so on. These are all important capitals. 
  10. However, given our tight labour market and slower manpower growth in the future, I believe that human capital will increasingly become the most valuable asset of any organisation, big and small.
  11. To do well, SMEs need to make their investment in people a core priority. Their capacity to grow will be constrained by the human capital they have built.
  12. However, in 2014, SPRING and Hay Group conducted a pilot study with close to 180 SMEs on SMEs’ HR Maturity. Results from the pilot showed that most of the SMEs did not have strong HR practices and are especially weak in the area of Training & Development.
  13. This needs to change.
  14. We have launched major initiatives under the SkillsFuture movement. SMEs can tap on these programmes to build their local talent pipeline.
  15. This morning, I am pleased to share with you that we are doing more to help our SMEs.
  16. Recognising that the needs and capabilities of SMEs are different from the larger enterprises, we are launching the “Human Capital Movement in SMEs” today to support SMEs in becoming better employers who can provide better careers and compete better for the workforce of today and tomorrow. Let me elaborate.  
  17. First, to build up a community of passionate SME Human Capital Advocates who will share their best practices in building human capital.  SMEs often find such learning and sharing more useful than attending courses.
  18. So far, SPRING has recruited about 10 exemplary HR directors from the private and public sectors who have volunteered their time to share their perspectives and experiences in talent development with SME bosses and their HR teams. This will be done through platforms such as learning forums with SMEs. Selected SMEs who are looking to scale up its HR capabilities would also have the opportunity to be matched to a Volunteer HR director for a one-on-one engagement. Some of the Volunteer HR directors are present today. Among them is Mr Foo Chek Wee, HR Director from Zalora, who will be joining us on the dialogue panel.
  19. Next, to help SMEs assess their current HR capability, SPRING has developed a new HR Diagnostic tool. Using this tool, SMEs can analyse their current state of HR maturity, and identify areas for improvement. They can then prioritise various HR interventions needed to support their business growth.
  20. Soon Aik Holdings, an Engineering firm serving the automotive and marine industries, is an example. The company had difficulties attracting talent to support its business expansion. With the help of the HR Diagnostic tool, Soon Aik upgraded its HR capability with the support of the Capability Development Grant managed by SPRING Singapore.
  21. It has also strengthened its career progression and succession planning frameworks to better attract and retain talent. We hope to see many more SMEs taking the path of Soon Aik Holdings.
  22. Last but not least, to help SMEs build a strong employer brand. With better HR capabilities and career opportunities, SMEs can participate more visibly in career roadshows and provide scholarships and internships. Leveraging on our partnership with Trade Associations and Chambers (TACs) and Institutes of Higher Learning (IHLs), SPRING will work together with SMEs to engage young talent and showcase promising career opportunities. We will also celebrate their success with public recognition and profiling.
  23. With a strong “can do” spirit, many SME bosses have brought their businesses to where it is today. The journey ahead is long and challenging, but exciting and can be rewarding too. 
  24. I encourage our SME bosses to adapt and persist, step up your focus on the most valuable capital of the future – your human capital, and emerge a winner in this race for talent.
  25. You will not be alone on this journey of building human capital. The tripartite partners are with you in this Human Capital Movement in SMEs. I thank you all for your commitment and partnership.
  26. Together, we can create better businesses for the SMEs, better careers for our people, and better growth for our economy.
  27. I wish you a fruitful journey ahead. Thank you.