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Speech at Retail Sectoral Manpower Plan (SMP) Launch

Mr Lim Swee Say, Minister for Manpower, Clarke Quay Central

Friends and partners

Good morning.

  1. I am happy to join you here for the launch of the Sectoral Manpower Plan (SMP) for the retail industry.
  2. Before we proceed with the launch, let me provide you with a background.
  3. Our Singapore economy, workforce is undergoing a major transition.
  4. If you look at our local labour force growth, it has slowed down – 2.7% p.a (2006 – 2010) to 1.7% p.a (2010 – 2015) and this year it will be significantly slower. In other words, local workforce will be harder to come by.
  5. At the same time, jobs growth in previous years was about 3% to 4% and it will be significantly lower this year.
  6. Our job here is to maximise the jobs match and minimise jobs mismatch.
  7. For example, if the industry is unable to attract sufficient suitable workers, they will experience slower growth and eventually our economy will be less competitive and unemployment will go up.
  8. If workers are unable to find sufficient suitable jobs for them, eventually we will see rising underemployment.
  9. If the workforce is not able to provide the skills that are needed as the industry transforms, we will have a situation of structural unemployment.
  10. All these are undesirable.
  11. A better outcome for all is for everyone to work together to transform businesses and workforce together.
  12. We must work together to create better jobs, and with better jobs, offer better careers and opportunities for people. We must also work together to make every worker a better worker. Because with better workers, collectively, companies will be able to compete better, grow better. Our economy will sustain the growth longer better. Importantly our people will have a meaningful career progression.
  13. For this transformation to happen, it is best done on the sectoral level where we are focusing our resources at.
  14. This is the reason why we embark on this journey, sector by sector, to formulate sectoral manpower plan; How do we enable workers to have skills of the future and transform jobs to be the jobs of the future and with the jobs and skills, create careers of the future.
  15. We also recognise that this transformation can only take place effectively if the tripartite partners work together. It must involve the unions, workers, businesses, government agencies.
  16. This is the reason why the Retail Sectoral tripartite Committee is formed for this Retail SMP together with employers, unions, industry associations, SPRING and WDA.
  17. For the retail industry, this transformation is especially relevant because all around the world, retail is undergoing a game-changing transformation.
  18. For example, external challenges:
    • The rise of e-commerce and m-commerce, is disrupting retail as we conventionally know -
      • Online retailers are going offline
      • Offline retailers are going online
      • Technology is neutral
      • Idea is open secret
  19. The pace of change is only going to increase and for those who are willing to run faster, we must be willing to lend them our support.
  20. Pioneers and early adopters are fundamentally changing the way consumers shop, the way retailers compete and retail jobs are carried out.
  21. At the same time, there are local challenges too
    • Competing for customers with other regional shopping destinations
    • Weaker business sentiments amid softening economic conditions
    • Relatively higher business costs due to rental, wages, strong currency
  22. Manpower is yet another common challenge.
  23. In the past 2 years, the retail sector hired both local and foreigners in larger numbers and this is not sustainable with slower workforce growth.
  24. In the next 5 years, the retail industry has to transform itself to become more productive, more innovative and more manpower lean. The quantity of manpower cannot be the driving force behind our growth. At the end of the day, we should go for quality of manpower, quality of jobs, quality of efficiency.
  25. As you have seen in the video, many pioneers in the industry have shown that transformation is possible if you continue to upgrade business models and redesign jobs for higher productivity.
  26. SMP comes at a very timely juncture.
  27. I hope it will spur more businesses and workers transform together.
  28. Under the SMP, we hope to achieve a few outcomes.
  29. First - Quicken the pace of business model transformation, jobs redesign. We would like to see more retailers to embark on this. We also recognise most are SMEs, they need extra support. With this in mind, I am happy to say that SPRING will conduct a “business model and job redesign study”. Employers can take the study findings as a guide to restructure and adopt leaner manpower models.
  30. Second - Enhance core HR competencies and enable companies to build a strong culture to value human capital and invest in them so that they can better the core driving force in the industry.
  31. Third - we have to find ways to bring the better workers of the future to the better jobs of the future in the retail industry. In this regard, under SkillsFuture, we have many major initivatives which we hope will be adopted actively and pro-actively by various players in the industry. For example,
    • Strengthen transition from school to workplace via Enhanced Internships (EO) and Earn and Learn Programme (ELP)
    • Deep skilling via the SkillsFuture Study Award
  32. At the same time, we must not neglect those already in the sector like the mid-career and the mature workers. We must find ways to help them to deep-skill and up-skill for example using the Leadership Development Initiative. We hope to work closer with more companies in the industry to develop leaders of the future at all leaders. Their success will help to spur more to join the industry.
  33. In conclusion, I would like to thank all our tripartite partners who have contributed to the formulation of this retail SMP formula. Many of you are here - the Retail Sectoral Tripartite Committee, Employers, unions, industry associations, my colleagues from SPRING and WDA.
  34. Let me also emphasise, today’s launch is only the beginning , because in the next five years, if you want to success in the transformation, the SMP is something to start on and we still have a lot more to do.
  35. Today’s visit to Decks retail shop is an eye-opener for me. They have:
    • improved business outcomes for their company
    • create better jobs for Singaporeans and made their careers more meaningful
    • brought us faster and closer to a manpower-lean economy
    • created better jobs for Singaporeans make make their careers more meaningful
  36. Decks is a good illustration of the power of tripartite partnership.
  37. Their cost of this transformation is not cheap. However under the tripartite partnership, SPRING supported this innovation through Capability Development Grant of up to 70% and the Government supported the remaining 30% with the Productivity and Innovation Credit Scheme (PIC). As a result the business cost to them is very low.
  38. I hope the success of Decks and other retails who are the early adopters will encourage more players in the retail industry to come on board.
  39. Together we can ensure that the retail industry will become even more vibrant and at the same time, for Singaporeans, the retail industry will offer them better jobs, better career.
  40. Most of all, I hope in the next five year and beyond, you can see the retail industry being transformed to a manpower lean industry with a strong Singaporean core - Singaporeans having meaningful jobs, meaningful careers and hopefully a more meaning pay as well.
  41. With this, I thank you for your partnership and contributions.